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the giant ponzi scheme: Madoff jailed for 150 years
let us now contemplate bernard madoff's giant ponzi scheme.
but that's not quite as much fun as contemplating the sec's mea culpa issued over madoff's giant ponzi scheme.... Quote:
in case you haven't been following this---and admittedly it's almost difficult to follow simply because it seems like madoff is to the financial meltdown what the flying shoe in iraq was to that debacle--the incident inside the incident that sums up much about the incident as a whole---and in a context where you find, even on the nitwit cable "news" shows talking heads who lean into the camera and say "deflation: it's a bad thing"----and so it seems like Everything is Sliding Toward the Crapper--now there's this. so the Everything that is Sliding Toward the Crapper is now taking the time to stage metaphors of itself on the way down. last thing we want to see really is the baroque.* apparently bernard madoff told his sons a couple weeks ago maybe, i like to think over thanksgiving dinner, that his investment firm was a giant lie, a ponzi scheme, kinda like the one that max bialstock runs in "the producers" but really fucking big. the difference is that where max would literally and metaphorically screw old ladies, madoff did it to banks, charities, pension funds, and small investors. having heard this confession, his sons decided to turn him in. (aside: after watching too much in the way of crappy reality shows, i am curious abotu the oedipal dimension of this action...but that's another matter, one for gossip girls like me.) and a few days after news of this turn-in and subsequent arrest broke, the mea culpa comes from the sec. now i find this to be amazing. and there are lots of questions that could be asked about all aspects of this---but at the outset, i'll pose only one and see if things develop. in yesterday's ny times, thomas friedman, who i generally see as a bit of a putz, did an edito that linked the madoff ponzi scheme to the derivative market as a whole. the basic argument is that there's no particular difference between what madoff was doing and the bundling and selling of negative numbers as a variant of commodity future---at the level of what friedman seems to understand as the fradulent nature of the products themselves---at the level of the collusion between a form of gangster capitalism and the agencies which were supposed to be regulating it---at the level of outcomes. do you agree with this assessment? in other words, do you see a repetition of the mortgage market implosion in the madoff scheme? the correlate of this is that madoff's scam surfaces at a particularly bad moment and is functioning as a metaphor for american-style capitalism as a whole. friedman makes this argument by situating himself in hong kong, having a conversation with a banker whose basic claim is that this amounts to a destruction of the ideological construct of america as model which presides over contemporary forms of cowboy/gangster capitalism (take your pick---all that changes are the outfits)...and undermines the legitimacy of the united states as center of an overarching rationality which the us has not hesitated to impose on other countries---because apparently the united states has at the same time exempted itself entirely. if this is a widely shared view--and looking around the international press yesterday, it is reasonable to see it as widely shared, it follows that the madoff scheme, coming out now, really does intensify the problems facingthe united states by extending what was arguably already a political crisis (following from the variety of actions undertaken by the bush administration in particular) into a political crisis that directly affects the international economic order---in other words, the political crisis is tracking from enabling condition to internal factor. what do you make of this? what should the united state do now? * in the sense that the whole can be explored through the contemplation of details: the whole is the proliferation of details; there is no center except as implied by the proliferation of detail... |
I think it sucks he's out on bail. He managed to cough up some 20 mil. for that. Some kid steals a grand from the local liquor store and he's in jail waiting for trail with a "no bail" order. This guy's accused of ripping off BILLIONS. The guy took money from charities and children's hospitals from what I read, Let him sit in jail and wait for trail too.
What should the US do about it? Hell if I know. But I'd sure as hell start with seizing every asset he and his family currently holds. If it turns out he didn't do it they can have it back. |
I'm waiting for the talk of federal bailouts for these executives to begin. That seems to be mantra of 2008.
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I want to be mad. I want to be furiously steamed. I really do, but I just can't find the gumption to be upset. I couldn't put my finger on why I have this inability to be full of righteous indignation at what Maddoff has done until I saw this simple question asked:
"How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?" Ponzi Scheme: You give me money, I turn around and get you interest on it. Don't ask me how I do it, that's my little secret. Investments, such as hedge funds: You give me money, I turn around and get you interest on it. Don't ask me how I do it, that's my little secret. Is the wealth of the legitimate investors really there? After seeing what happened to Bear Stearns when investors made a run on them, I don't think there's a whole lot of investment companies that are that much different than from what Maddoff ran. |
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I guess the Putzpoint is that any payoffs from derivatives bets have to come from other Players because they are most definitely not coming from any increase in value within the system. In that sense it is like a Ponzi scheme. Now, the difference between Ponzi schemes and things like speculative bubbles seems to be mostly in agency of the schemer and the discourse around the scheme. Some would call it hairsplitting. Like the proverbial blind squirrel, Moustacheputz got something right. The mode of accumulation during the boom becomes the mechanism of failure in the bust. What to do? You mean aside from the immediate aufheben of the commodification of labour? Well, geez, how about hiring a few more overseers for the SEC out of the ever-swelling ranks of the unemployed? We could just redo the entire structure of New Deal financial regulation that the Reaganites thought sooooo burdensome. Wall Street needs some very tough love. Some bad ass regulatory types might scare those punks straight. Boot camps, weekends in jail before licensing might be a good idea. Dare to discipline! |
I say we drag them all before congress and give them a good stern scolding, and grill them on why the flew to DC in private jets and not on commercial flights.
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just absurd really.... totally actually.
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And he was mailing gems to family members it looks like. Bernie Madoff Hiding Gems From Authorities? | Mark Pasetsky's CoverAwards
The thing is, I'm not sure how many people would act any differently. There needs to be some serious financial consequences for him and his family. (What if his wife divorces him now, does she get half? Half of what?) It might seem harsh going after people who indirectly benefited, but I think it would keep Wall Street in check if they couldn't hide their money and knew they would hurt spouses and offspring with financial ruin too. They can collect a welfare check just as well as someone who lost their job from the mess he caused. |
"the giant ponzi scheme"
Try Social Security and the new "Stimulus" package. What the Hell, the biggest Ponzi Scheme is our federal government. |
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This guy is merely taking your eye of the ball. |
Right...who cares that more than 2 million people lost their jobs last year and tens of thousands already this year.....fuck 'em!
The social security "ponzi" scheme...who cares that it provided a better quality of life for hundreds of millions of seniors over the last 75 years....fuck 'em! It will work itself out if we just leave it alone. Compassionate conservatism and libertarianism? |
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The american people want to see someone burn for this economy, I think their attention should be focused on the bigger fish who continue to rob us. |
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"the giant ponzi scheme"....Try Social Security and the new "Stimulus" package. What the Hell, the biggest Ponzi Scheme is our federal government. |
The 'ponzi scheme' was global and the US federal govt, in fact all govts globally are dwarfed by the scale.
A recent measure of derivatives in financial markets had them totalling $860 trillion. That's about 15x gross global production. The Great Debate Debate Archive U.S. and UK on brink of debt disaster | The Great Debate | Quote:
Basically, all the options open, in the end, amount to default, inflationary/devaluation default, bankruptcy or jubilee. Choose your victims: Lenders Borrowers Shareholders All of the above. (Tax payers aren't an option, the scale is too big.) And, though this clearly points towards a ponzi scheme of sorts, it may be in the wrong thread? |
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The point was how they've been managed, not a knock on the good they've done. sheesh. |
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i caught a bit of markopolos' testimony on c-span. he presents an interesting case, both in terms of information and in himself as a delivery system---the former is quite damning and the indictment of the entire sec that followed from it seems accurate and justified--the bottom line is that the sec is entirely in bed with the industries they are supposed to regulate and that for there to be coherent regulation there has to be a purge of the upper management of the sec and a fundamental shift in orientation. the picture that emerges is of a regulatory body made over in the republican image of a regulatory body--staffed with incompetents, corrupt fundamentally, unwilling and unable to carry out it's function.
at the same time, markopolos comes across as being extremely tightly wrapped, teetering on the edge of paranoia by disposition, the sort of person whose delivery is its message's worst enemy. this following provides a watered-down summary of the proceedings: Quote:
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Madoff gets 150 years
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My friends who used to work at the SEC, in various capacities, now use that experience to make a living. |
I'm glad he got 150 years. Now I wish they would find all the rest of the people involved. Just hope he doesn't get out in 2 1/2 years for good behaviour,....or because he isn't accustomed to prison life. Probably will be in a high end lock up in 6 months waiting for parole.
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most of these wall street pricks do what madoff does, it just that alot of them don't get caught
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"Most"? I doubt it. Despite what we might like to think, Wall Street itself is not a giant Ponzi scheme.
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Are you sure?
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There are people who make real money there and they have never even seen Wall Street.
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the next guy to go down is Allen Stanford.
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I know. Just seems like it used to be I'd buy something with the idea that it had value. I buy it thinking the dividends and earnings would pay off over time. Now I spend time, like right now, scanning to find what bio-med stock just got the FDA's AOK for their latest and greatest cure all or what energy stock is being hyped by Motely or Marketwatch et el. I figure out which ones I want to buy. I hold them until I make a few points then dump them before everyone else realizes it's all hype or the cure all does more damage then good and is recalled. I use to buy stocks that I planed on holding for at least a year (US tax thing) in the last six months or so that's completely changed. Now I buy and sell as soon as I see profit. I've bought and sold the same stock in less then 40 minutes. Actually Monday I think I broke the 30min. barrier. I have no idea what my accountant is going to say at the end of the year. But this is the only way I can figure out how to make money in this market. |
So what you're saying is you aren't a value investor. ;)
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I have a few things that I hold. But mostly they pump and I jump and dump.
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Oy. Tully, I get cold calls constantly. Mostly I tell them, as politely as possible, no thank you. The ones that are really persistent and insist on mistaking politeness for indecision end up having me hang up on them. These shitheads can only make money if people listen to them; they''re not invincible. Stick with someone reputable and don't try to make a killing overnight, and you'll do just fine. The miracle of compounding really does work.
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I keep my eye out for stories about the latest greatest stock or company. I buy it right before close or just at open then sell it after the bump. For me this has been working very well. Thursday was a very nice day. Weds. eve I bought a stock for a little over a buck a share. Thursday morning it shot to 1.59 within an hour. I managed to get out at 1.52. Last I saw it it was around 1.30. That was unusably lucky and made my month. Most of the time I manage to get 0.5-3% and I'm happy. Some days I win, some I lose. Last week I bought a stock and couldn't get rid of it until I lost 8%. But so far I'm winning way more then I'm losing. I think the key is not to get greedy and try to hit the absolute peak. Just make a profit, roll it over into my retirement account and head to the beach. |
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