We Wrote About Madoff

[midcan5]

The Madoff story exemplifies the reasons all economic ideologies fail, those pesky humans. It is about trust, naivete, greed, false hope, the American dream and the destruction of the American dream. It further verifies if it is too good to be true it is too good to be true.

'What We Wrote About Madoff'

"Our 2001 story, excerpted here, questioned Bernie Madoff's too-good-to-be-true track record well before his Ponzi scheme was exposed.

"What Madoff told us was, 'If you invest with me, you must never tell anyone that you're invested with me. It's no one's business what goes on here,'" says an investment manager who took over a pool of assets that included an investment in a Madoff fund. "When he couldn't explain how they were up or down in a particular month," he added, "I pulled the money out.""

What We Wrote About Madoff - Barrons.com

Bernard L. Madoff - Business Exchange

 

[Skull Pilot]

The SEC Makes Wall Street More Fraudulent - Robert P. Murphy - Mises Institute

The mainstream reaction to the Bernard Madoff scandal was inevitable. Whenever a government regulatory agency proves itself to be incredibly incompetent or corrupt, the respectable media swoop in to declare that the "free market" has failed and the agency in question obviously needs more money and power.

In the private sector, when a firm fails, it ceases operations. The opposite happens in government. There is literally nothing a government agency could do that would make the talking heads on the Sunday shows ask, "Should we just abolish this agency? Is it doing more harm than good?"

The pattern plays out perfectly with the SEC and the Madoff bombshell. Suppose a few years ago, I told a group of MBAs to imagine the worst screwup that the SEC could possibly perform, something so monumentally incompetent that members of Congress might openly question whether the agency should continue. I think that at least half of the class would have come up with something far less outrageous than what has happened in fact.

Everyone who reads the headlines knows that Bernard Madoff is accused of running a massive Ponzi scheme that, for over a decade, has ripped off investors to the tune of $50 billion. But those who dig a bit deeper learn that Harry Markopolos, who used to work for a Madoff rival, has been writing the SEC since at least May 1999, urging them to put a stop to Madoff's Ponzi scheme. (Markopolos examined the options markets that Madoff told investors he used to hedge his positions and yield his steady stream of dividends, and Markopolos concluded that Madoff's results were impossible.) Incredibly, the SEC apparently had evidence in front of its face sixteen years ago (in relation to another case) that Madoff was a crook.

 

[editec]

The Madoff story needs a damned good journalist to tell it, I expect.

I can't wait for the books that this event is going to generate.

The man must have been a supergenius at reading people to be able to pull off a PONZI scheme that lasted this long, got so damned huge, and suckered in so many presumably market sabe people.

I confess a certain amount of shadenfreuden to read that so many "insiders" got burned, but the fallout of so many truly innocent people and decent charities getting burned takes the all the joy out of that envy-driven emotion, too.

 

[midcan5]

I watched part of the congressional hearing and while some of the queries were good most were repetitive and not very insightful. I've always felt commissions for hard work were a good thing but you can see quickly the trouble they cause when the less than honest or the greedy get their hands on a means to make money. The man who lost everything looked so downtrodden and yet 10% returns with no down period is impossible, but they wanted to believe.

Pam Martens: It's All One Big Lie

Lewis gives a picture you wish weren't so.

The End of Wall Street's Boom - National Business News - Portfolio.com