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kallend

The Madoff scam

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I know one couple in their 70's who lost just about everything they had to Madoff. Their kids are trying to figure out how to support them now. Which, of course, will be another blow to the economy.



I'm told the pawn shops in Beverly Hills and Palm Beach are doing a brisk trade today, on yachts, diamonds, Mercs, etc.
...

The only sure way to survive a canopy collision is not to have one.

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I read an article today that just leaves me shaking his head. The article suggests that plenty figured he was up to no good on the basis of the consistency of his returns, etc. So they went to him and gave him the money.

"But rocket," you say. "If he was up to no good, then why would they give him those billions?" Because - they thought he was insider trading!!! Getting them good and safe returns based on market info not available to others.

They just thought he was cheating... Exhibit "A" of why we are where we are. Greed, greed and more of it. And Madoff was the best at satisfying the lust for it.


My wife is hotter than your wife.

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I read an article today that just leaves me shaking his head. The article suggests that plenty figured he was up to no good on the basis of the consistency of his returns, etc. So they went to him and gave him the money.

"But rocket," you say. "If he was up to no good, then why would they give him those billions?" Because - they thought he was insider trading!!! Getting them good and safe returns based on market info not available to others.

They just thought he was cheating... Exhibit "A" of why we are where we are. Greed, greed and more of it. And Madoff was the best at satisfying the lust for it.

I think they got what they deserve. Yr. after yr. of unrealistic returns and no questions asked. More greedy rich crooks. They all need a Ken Lay. Now they are saying they can probably write off the losses. Maybe congress will give all their (rich)friends some bailout money. >:(Edit to add: And here we go.>http://wcbstv.com/business/madoff.ponzi.scheme.2.888036.html >:( Taxpayers gonna feed the rich again? Arrgh. >:(>:(>:(...."Congress created the SIPC in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts. Funds can be used to satisfy the remaining claims of each customer up to a maximum of $500,000. The figure includes a maximum of up to $100,000 on claims for cash.
I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

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>I think they got what they deserve. Yr. after yr. of unrealistic returns and no
>questions asked. More greedy rich crooks.

I know a few of them. A dentist who lost everything after he retired. A doctor who trusted her parent's judgment. None of then seem like "greedy rich crooks" to me.

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And all you poor schmucks whose 401ks are in the toilet . . . too effin bad--now get back to work (if you still have a job). Socialism for the rich--free enterprise for you scumsucking proles. :(

[Don't forget to bow as the chariot passes]

“Keep your elbow up!"

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Surprised we don't have a thread already.

www.bloomberg.com/apps/news?pid=20601109&sid=aVTJBQRWrvlI&refer=home


Another one of those nice rich people we've been cossetting for the past 8 years.



cosset

Function:
transitive verb
Date:
1640

: to treat as a pet : pamper

Learned a new word today...thanks.

In regard to the topic, I don't have much to contribute or discuss because my response to this kind of event is a rather emotional one like "put him in jail for life with no chance of parole."

Be humble, ask questions, listen, learn, follow the golden rule, talk when necessary, and know when to shut the fuck up.

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>I think they got what they deserve. Yr. after yr. of unrealistic returns and no
>questions asked. More greedy rich crooks.

I know a few of them. A dentist who lost everything after he retired. A doctor who trusted her parent's judgment. None of then seem like "greedy rich crooks" to me.



people who invest in hedge funds are supposed to have a certain level of financial sophistication. Dumping all their money into one rather suspect outfit is really not an example of this.

Most were not crooks, but greedy and (formerly) rich seem to apply.

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>people who invest in hedge funds are supposed to have a certain
>level of financial sophistication.

So are people who get ARMs and buy mutual funds. But:

a) they're not always all that sophisticated
b) this wasn't the failure of a hedge fund, it was the wholescale defrauding of investors. Investments that he told people they had did not exist.

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The Fleecing of America continues at all levels. Here are two experiences of mine just from the last week, not quite on a Madoff-level though.

(1) My long-time gym sends me a note in the mail, no postal address, no contact info of any kind on the letterhead, just the corporate logo. Paraphrased: "We think we have made so many improvements, hence we will charge you $1/ mo more starting Jan 2009." Never mind that they are party to a written contract that sets a certain, fixed monthly fee. WELL, THEY CAN TRY.

(2) Had to take my Ford Explorer 2002 in for repair: turns out a vacuum hose was leaking. Fix it! Get a call that the fuel filter ($9.95 part) also needs to be replaced at $60. Location of the fuel filter on an Explorer is kinda inconvenient, so go ahead and do it. Looking at the invoice today line-by-line, they charged $60 for fuel filter replacement and a $55 non-descript Environmental Fee to dispose of the spent fuel filter. $115 for a freakin' fuel filter??? WELL, THEY CAN TRY.

My point is that Madoff is just what happens on a much smaller scale daily. Unfortunately, the US seems to have turned into the premiere home for scam artists.

P.S.: (i) the gym is Crunch, a minor national chain; (ii) the dealer is Tim Stewart Peachtree Ford, Atlanta, an Oval Certified Ford Dealer and Service Center.

P.P.S.: Let's start to call out the crooks at all levels by name.


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I know one couple in their 70's who lost just about everything they had to Madoff. Their kids are trying to figure out how to support them now. Which, of course, will be another blow to the economy.

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>people who invest in hedge funds are supposed to have a certain
>level of financial sophistication.

So are people who get ARMs and buy mutual funds. But:



no, they are substantially different. To participate in a hedge fund you have required asset levels and experience. To buy a mutual fund or an ARM you merely need money.

Those people should know better than to put everything in a single fund. It's been over a decade since the spectacular failure of LTCM. High return means high risk. I'm not going to feel bad for high worth investors who still don't practice diversification. Those that did are still getting hammered this year, but they still have more than half, and the likely recovery of the base over the next couple years. These people are merely claimants on the remaining assets.

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> To participate in a hedge fund you have required asset levels and
>experience. To buy a mutual fund or an ARM you merely need money.

No, to participate in a hedge fund (specifically the sort Madoff was managing) all you need is money. In his case you also needed an "in" or a recommendation from someone else.

>Those people should know better than to put everything in a single fund.

Of course. But let's take an example:

Let's say you have a bunch of money and you choose to invest it. You go to your financial advisor and he recommends a combination of mutual funds and bonds. You decide instead to put it all in one internet startup, and buy $100,000 in stock through Etrade.

Case 1: The internet startup flounders and you lose all your money. Your fault. Etrade bears no fault.

Case 2: The internet startup does OK. You go to withdraw your money, but Etrade advises you that they instead invested it in a different company and you have lost everything. Etrade's fault, even though you were foolish to not investigate them more, and foolish to invest it all in one company.

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>I think they got what they deserve. Yr. after yr. of unrealistic returns and no
>questions asked. More greedy rich crooks.

I know a few of them. A dentist who lost everything after he retired. A doctor who trusted her parent's judgment. None of then seem like "greedy rich crooks" to me.

THE MAJORITY WERE. That's all
I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

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Madoff's Willing Partners

By Len Fisher

Saturday, December 20, 2008; Page A17

There seems to be little doubt that Bernard Madoff is a cheat. His apparent Ponzi scheme, in which capital from new investors would have been used to pay "dividends" to earlier investors, ultimately cost the participants many billions of dollars. But was it all Madoff's fault? I contend that the losses would have been less severe, and might not have occurred at all, if many of the Madoff's investors had not been cast from the same mold that Madoff was.

The facts should have been enough to make anyone suspicious. Madoff's accounts were only perfunctorily audited, and his statements were printed with a dot-matrix printer on lightweight copier paper. Above all, his business returns were consistently good -- too good -- and he never reported a down month, let alone a down quarter or year. Let's be honest; such oddities had to have set off alarm bells. So why did so many professionals continue to invest with him?

Only one answer makes sense. Some of those investors must have suspected that he was a cheat but continued to invest because they thought they were benefiting from that cheating. In other words, they took him for a different sort of cheat from who he was -- one who was using information gained from his market-making operation to earn illegal profits rather than one who was operating a breathtakingly audacious Ponzi scheme.


And by continuing to invest with Madoff under this belief, those institutional investors became complicit in that cheating. In fact, they became cheats themselves but without being aware of all that can happen once two parties become involved in a mutual cheating game.

Those consequences can be explained through game theory, a system for examining the "best" strategies that others might use to further their interests (in normal life as well as on Wall Street) to determine the "best" strategies to use in response. It sounds simple, and it often is -- so long as you can be confident in your assessment as to which strategy the other party will use.

The most difficult "game" situations are those that present the actors with a choice between cooperation for mutual benefit or going it alone. If the other party can be trusted to use a "cooperative" strategy that will benefit both of you, then you, too, can cooperate, having confidence that you will do better than you would have on your own. That may be the choice Madoff's investors made, believing him to be acting for their mutual benefit and thus "cooperating" by continuing to invest with him.

The downside of this approach is that one or both sides may conclude that they can do better by cheating on the cooperation. Mutual cheating, though, leads to a series of classic dilemmas (brilliantly exposed in the late 1940s by game theorist John Nash, a Nobel laureate in economics) in which both parties end up worse off than if they had continued to cooperate.

Madoff and his investors got trapped by such a dilemma. The principal way to escape from such dilemmas is through mutual trust.

Social psychologist Robert Cialdini has identified six "weapons of influence" that we use to gain trust, including returning favors; commitment and consistency; being an authority figure; and being liked. The trouble is that all of these can be faked, which is just what Madoff did. Game theory suggests a stronger solution, which is for each party to demonstrate "credible commitment" to prove that it can be trusted.

If Madoff's investors had looked for this sort of proof of commitment, in the form of proper auditing and a transparent portfolio of investments whose value could be checked, they would not have been caught out in so spectacular a fashion.

Why did they fail to look? It can only have been because they thought that they would do better by not looking. By colluding in the cheating that they thought was going on, the investors who did so provided an example of one of game theory's most important and least heeded lessons: Cheats can prosper, but only when the other side isn't cheating as well.
...

The only sure way to survive a canopy collision is not to have one.

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in german we have a saying, that goes like this:
man kann nicht so viel fressen wie man kotzten möchte

bad translation: it is impossible to eat so much as you'd want to throw up
The universal aptitude for ineptitude makes any human accomplishment an incredible miracle

dudeist skydiver # 666

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Some new information from CNBC suggests that Madoff is showing either some signs of severe sociopathic behaviors or connections to the Russian mafia- The speculation is the result of an analysis of the difference between the 50 billion dollar amount that Madoff claims to have lost, and the figures estimated by Bloomberg and Axia which are much lower.
http://www.cnbc.com/id/15840232?video=987308800&play=1

The sociopathic scenario to me seems much more plausible because criminal activity at this level lends itself to boastful claims and a certain pride in hoodwinking and outsmarting people on such a large scale. I ask why would he volunteer such a large loss figure if that was not actually the case? That seems contrary to the behavior of a person who is trying to extricate themselves from a possible conviction.
Beware of the collateralizing and monetization of your desires.
D S #3.1415

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wholescale



...The word you've entered isn't in the dictionary. Click on a spelling suggestion below or try again using the search bar above.
Suggestions for wholescale:

1. wholesale 2. wholesales
3. wholesaled 4. hela cell
5. honeysuckle 6. heliacal
7. Helles, Cape 8. wholesaler
9. helical 10. wholemeal
11. homeschool 12. horsecar
13. helicoidal 14. Herschel
15. Holocenes 16. hullabaloo
17. haulages 18. halalas
19. Haleakala 20. hullabaloos

did you mean #19?

Just kiddin.

Be humble, ask questions, listen, learn, follow the golden rule, talk when necessary, and know when to shut the fuck up.

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Another one of those nice rich people we've been cossetting for the past 8 years.



Madoff has been at it for more than eight years...:S
So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

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Another one of those nice rich people we've been cossetting for the past 8 years.



Madoff has been at it for more than eight years...:S


And the government has been doing it for decades...Social Security, anyone?
Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

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