Australian (ASX) Stock Market Forum

Bernard Madoff - $50 Billion Scam

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numbercruncher said:
:eek:


Put the criminal parasite in Prison for life @!
Click to expand...

But, being the criminal parasite that he is, he would chew up vast sums of taxpayer's money keeping him "comfortable" in prison.

Better still, strap a big knife in each hand, blindfold him and set him loose in suburban Melbourne. I'm sure the VIC Police would administer proper justice... :cool:


Edit: What am I saying! :eek: It IS "only" a piddly $50Billion of Play Dough after all. If it was $10Trillion, maybe the markets would drop 50 points before rebounding... having shown total indifference to the news and depth of the Ponzi scam so far.

aj
 
Aussiejeff said:
Better still, strap a big knife in each hand, blindfold him and set him loose in suburban Melbourne. I'm sure the VIC Police would administer proper justice... :cool:

aj
Click to expand...

Thats hilarious aj
ROFLMAO

I agree NC.

Who gives a flying f*ck how many charities or nice 'things'
this crook did to help others?

I beg you your honor can you please mitigate down my sentence, I know I scammed $50 Billion. :nosympath:nosympath

"All gangsters are patriotic"
Michael Gold
 
He's 78. His lawyers will drag this out for 2 years or so and then in sentencing say due to his age/health he should get a short sentence.
 
This scam will be Tsunami. By the time all the losers surface I believe more banks will fall and frankly most hedge funds will die as the last vestiges of confidence evaporate.

I found an excellent story on the web from one of the very few people who sussed out the scam years ago and steered their clients away. Worth a read particularly when you are trying to evaluate the legitamcy of a proposal.

Bernie Comes Out of the Closet
Not a year has gone by during the past fifteen that I have not contemplated what Bernie Madoff did (or didn't do) to make his money. Seventy to one-hundred basis-points-a-month. Net. Net. Net. During tempests, earthquakes, panics and crashes - even during the closure of the exchange itself, Bernie apparently minted coin like few others. Even Renaissance and Shaw tripped occasionally. Not Bernie. Yet no one knew what he did. It was one of the best kept secrets in the world. Oh yeah, sure, split-strike conversions were the official line. But every skeptical arb trader knew this couldn't be true.
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http://nihoncassandra.blogspot.com/2008/12/bernie-comes-out-of-closet.html
 
BradK said:
Can you spell out for us what deflation might mean for the average Aussie battler like myself? Declining house prices, negative equity, almost no access to credit, unemployment???
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"Only when that deflation has played out and rational policies that reward market-based management and returns are restored will it be worthwhile to invest again. In the meanwhile, any wealth saved securely from state seizure will "swell" to buy more assets in future - a key aspect of deflation and a key means of restoring the control of the economy into the hands of more farsighted savers and investors."

I think how it affects each individual will be, well, individual. But if you get through it with some wealth intact you got the above to look forward too.
 
I think there is another (yet another) underlying message here, one that has unfortunately been sprung before. Regardless of the controls in place by the regulators there will always be a means to bypass the law and rip the unsuspecting individual off. I will not mention names here but a certain blue chip (questionable) investment bank whom I have personal knowledge of has recently closed its margin lending business. You will not read about this in the press, but it suffered extensive losses due to rogue advisors in two separate locations. The issue is that the compliance controls that were in place were extreme to say the least yet they were still circumnavigated by those that wished to break the law.

If someone wants to break they law they will find a way.

End of story.

Compliance or not.

Regulator or not.

I think the important message is:

Trust no one.

Learn to do it yourself. Control your own account. Manage your own money. Take responsibility for your own destiny.
 
Has anyone read Steve Keen's latest post on Madoff's ponzi scheme?

http://www.debtdeflation.com/blogs/2008/12/13/the-worlds-biggest-ponzi-scheme/

I agree with him. The biggest one is actually our credit driven asset boom where it can only be sustained by increasing debt.

So I wondered how this is going to affect the global economy / markets in general?

My opinions are that it will have a flow on effect for other "legitimately operated" hedge funds where they will suffer as a result of the confidence damage caused by Madoff's scam. This in turns cause more liquidations than what has already "crashed" the commodity markets and perhaps make deflation an even stronger case for the shorter term.

Now my believes are that the commodity markets have become more and more efficient because of sheer number of participants by the hedge funds trying to exploit these inefficiencies. By erasing a large portion of their presence in the markets, it may provide us traders to utilise strategies that may not have worked in the past and may work again. That is, the markets may become more inefficient because of these hedge funds collapse. Sounds like good to me. :D

What do you think about it Nick?
 
New SEC boss Mary Schapiro gave Madoff's son a job :eek::eek:

http://business.timesonline.co.uk/t...ectors/banking_and_finance/article5364345.ece

Mary Schapiro, Barack Obama's choice to lead the Securities and Exchange Commission (SEC), previously appointed one of Bernard Madoff's sons to a regulatory body that oversees American securities firms.

It has emerged that in 2001, Ms Schapiro, currently chief executive of the Financial Industry Regulatory Authority (Finra), employed Mark Madoff to serve on the board of the National Adjudicatory Council ”” the division that reviews disciplinary decisions made by Finra.

:fu:
 
As Peter Schiff said a couple of days ago, don't send him to jail,Obama should appoint Bernie Madoff as his treasury secretary. US are running the biggest Ponzi/Pryamid scheme in the world with an endless supply of new buyers of t notes. The longer they operate(printing money) the larger the losses.
 
CAB SAV said:
As Peter Schiff said a couple of days ago, don't send him to jail,Obama should appoint Bernie Madoff as his treasury secretary. US are running the biggest Ponzi/Pryamid scheme in the world with an endless supply of new buyers of t notes. The longer they operate(printing money) the larger the losses.
Click to expand...

I wonder how many more Madoff's are out there.

And what future ramifications/ spin offs from such a poorly
administered system. :mad:

http://video.aol.com/partner/cnn/ma...im:50billion:scam:charities/?icid=VIDLRVNWS06

http://www.blinkx.com/video/charities-among-hardest-hit-in-madoff-fraud/hO6V_l9n_U7ug1Robq_-CA

:nono:
 
GumbyLearner said:
I wonder how many more Madoff's are out there.
Click to expand...

Gumby, you hit the nail on my head *OUCH* :)

MadeOff is just one domino in the Great World Ponzi Swindle.

I, being a Deep Thinker such as your good self ;) have pondered the imponderable - that there are many more tarnished Ponzi Idols to fall yet.

The flow on effect is incalculable. Coz the total number of PonziPoofs is as yet unknown.

*sigh*

:mad:
 
The Tragedy of Bernie Madoff

And speaking of things that should not be, yesterday I was talking with a few fellow money mangers on a conference call when the news came that Bernie Madoff had been arrested and his fund was missing at least $17 billion, and maybe losses were as much as $50 billion. This is so very, very tragic, as it is not just large investors with well-diversified portfolios who lost here. Many smaller investors around the world had significant sums of money with Madoff. Far too many were not as diversified as they should have been. Some of the stories already surfacing are of horrific personal losses to investors and retirees who have no way to come back from such losses.
The fact that Madoff will spend the rest of his life in jail in no way compensates for the loss of so many people whose lives have been seriously impacted. It is just so terribly sad.

Madoff is a topic that comes up very often in alternative investment circles. I have been talking about his fund with friends at various conferences for almost a decade. "How does he do it?" we wondered. His fund posted steady 1-1.5% monthly returns since 1996, with only a few losing months in all that time. Supposedly he was doing something called split strike conversions. Some speculated that he was actually front-running trades in his market-making business. (Interestingly, regulators who looked at his market-making business never investigated the fund to see if he was doing just that, although I believe there were suggestions and other hints to them.) But arbitrage traders in the same arena could never figure out how he did it, and many were openly sceptical. Everyone, even the smartest trading shops, had losing months and quarters. But not Madoff. The fund was a complete black box and no one knew exactly what he did. Oddly, I have never met or known of anyone who has ever met a trader who came out of Madoff's shop. I run into resumes of ex-traders at various other funds all the time. No one knew what he did, even employees in his (what seems to be legitimate) market-making business, which was walled off from his investment funds. This was a man who was once chairman of the Nasdaq Stock Market. He was trusted and looked up to.

There were signs if you looked for them. The lack of transparency, for starters. The fact that he did his own trades with his own firm and made commissions on them. There was no prime broker where the real assets could be seen. How do you run a $17 billion fund without a room full of traders? I have been on the trading floors of smaller funds, and there are scores of people. A fund that size should have a football field-sized trading floor. Even if it was computerized, there had to be programmers. And lots of them. And where were the geniuses who designed these programs? Jim Simons at Renaissance has hundreds of support staff for his operation. He is one of the best, and he has losing periods. The "auditors" of the Madoff fund was a firm that was located in one 13x18-foot room. For a $17 billion dollar fund? Really? Real audits take lots of manpower.

That being said, a lot of smart people invested in the fund. They trusted Bernie. And anyone who looked at those returns had to be a little tempted. After all, weren't regulators looking at it? (The answer is no.)
Now we know how he made those returns. It was a Ponzi. Except this may have been larger than Enron and ultimately more damaging to more people than any scandal in the past. I remember writing a few years ago, in response to an article in Forbes about some minor hedge fund frauds, that all the losses of all the hedge fund frauds combined did not equal an Enron or WorldCom or just the plain old loss in a few larger companies in the Nasdaq in 2000-2002. I can't say that now.

Note to my fellow alternative industry participants: There is going to be a rush by Congress to regulate hedge funds. The SEC tried to regulate hedge funds a few years ago but had to back away when the Supreme Court said they did not have the authority. When the stories come out over the next few weeks (and I have heard some that really cause me heartache), there will be hearings in Congress. Rules will be passed. Quickly. And they should be.

Instead of fighting regulation as many did last time, we should recognize that this is a war that cannot be won and bow to the inevitable and at least get a few benefits from regulation, like the ability to publicly post past performance (although given the carnage of late, that is not as attractive as when I suggested it a few years ago!). I am regulated by FINRA, the NFA, and the state of Texas. We have had an average of one audit a year by some regulator for the past five years. My firm is small and it does cost a lot, but it certainly does not keep us from operating and growing our business. And I must (grudgingly) admit it does keep us on our toes. So let's sue for whatever terms we can in what should be recognized as a total surrender. And then move on.

When I was a young man I wanted to grow up to be a science fiction writer. The real world has turned out much stranger than I could dream at that time. There are just so many things which should not be.
 

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