[glen]

Great quotes here:
MadeOff with Billions

Hedge fund explains complex money transfer:

Quote

It appears that at least $15 billion of wealth, much of which was concentrated in southern Florida and New York City, has gone to 'money heaven,'

Investor explains usual business activities:

Quote

Business as usual? Of course it's business as usual. We're getting screwed left and right.

Faith-best investing:

Quote

He was God to people.

To write the story took the following:
Reporting by Jennifer Ablan, Edith Honan, Aarthi Sivaraman, Leah Schnurr, Dan Wilchins and Phil Wahba in New York, Svea Herbst-Bayliss in Boston, Steve Slater in London and Lisa Jucca in Zurich; editing by Jeffrey Benkoe, John Wallace, Toni Reinhold, Gary Hill

Quite the team for such a small story

[pigpenz]

makes you wonder how this guy was able to keep this ponzi scheme going. People lined up to join country clubs where he was a member just in the hopes he might take their money....those who he turned down were the lucky ones.

[glen]

The human side:

The Madoff scheme hits home

Powell said:

... You've lost everything in your 401(k). And then my wife asks the question about the elephant in the room. What if the foundation's money was with Madoff? ...

How I Got Screwed by Bernie Madoff

Chew said:

The call came at 6 p.m. on Thursday, Dec. 11. I had been waiting for it for five years. When the call finally arrived, it was my wife Sarah who answered. What the person said on the other end of the phone was both simple and devastating: we were financially wiped out. ...

[babalu1997]

this is what happens when people who cannot add fractions go around getting degrees in finance

[Al_U_Card]

I was watching PBS and they interviewed some financial whiz who was talking about the next (of 2 or 3) cycles of mortgage renewals that were on their way....he said they each ALSO would require another $750 billion or so to back them up as well. Wassup with that?

[Al_U_Card]

Yet another mystery. The fed is repo-ing itself for 25 billion?

More incomprehensible gobbledygook

[pigpenz]

the NY times had an article on sunday that was sort of a follow up the this scheme.
It was basically touching up on the fact that alot of very rich people arent very bright when he it comes to handling their financial situations.....in short they let their egoes get in the way of being able to admit that they dont know how to handle financial matters. that with wealth it is no gaurantee for brains.

[jtfanclub]

This was so weird---everybody knew he was cheating. He didn't make any real effort to hide the fact. Everybody just assumed that he was cheating somebody else. Surely he wasn't cheating them?

[barmar]

jtfanclub, on Dec 16 2008, 08:51 PM, said:

This was so weird---everybody knew he was cheating. He didn't make any real effort to hide the fact. Everybody just assumed that he was cheating somebody else. Surely he wasn't cheating them?

Isn't that the nature of most Ponzi schemes? People near the top of the pyramid do well, at the expense of those at the bottom (because they can't find enough new participants to go below them). The problem is that participants generally don't know where they are in the pyramid. Everyone who joins thinks (hopes?) that they got in early enough to be one of the winners.

[pigpenz]

barmar, on Dec 17 2008, 02:04 AM, said:

jtfanclub, on Dec 16 2008, 08:51 PM, said:

This was so weird---everybody knew he was cheating.  He didn't make any real effort to hide the fact.  Everybody just assumed that he was cheating somebody else.  Surely he wasn't cheating them?

Isn't that the nature of most Ponzi schemes? People near the top of the pyramid do well, at the expense of those at the bottom (because they can't find enough new participants to go below them). The problem is that participants generally don't know where they are in the pyramid. Everyone who joins thinks (hopes?) that they got in early enough to be one of the winners.

yet when he has been doing this for 20years or so how can you possibly believe that your in at the beginning?

[Winstonm]

The disgusting thing is that Cox's SEC had been notified of this scam years ago and did not investigate.

The Invisible Hand is Flipping Us the Bird.

[y66]

According to The Financial Times:

Quote

The SEC conducted two inquiries, in 2005 and 2007, into Mr Madoff’s company. The 2005 examination found three violations of rules requiring brokers to obtain the best possible price for customer orders. In 2007, enforcement staff completed an investigation and did not refer the matter to the SEC commissioners for legal action.

I do not understand why Christopher Cox is still chairman of the SEC.

[Al_U_Card]

Because the people "in charge" got out of the Ponzi scheme while they were still ahead...

[eros2]

Investment has nothing to do with faith. If you have faith in something, that is speculation. Investment is based on concrete data and tangible fundamentals.

I have no sympathy for anyone who falls for something like this.

[y66]

Quote

Investment has nothing to do with faith.

Amen bro. And that goes double for citizenship ... from now on!

[hrothgar]

jtfanclub, on Dec 17 2008, 04:51 AM, said:

This was so weird---everybody knew he was cheating. He didn't make any real effort to hide the fact. Everybody just assumed that he was cheating somebody else. Surely he wasn't cheating them?

I've heard a lot of analysis that corresponds with this posting:

Madoff was consistently beating the market. this (generally) isn't possible.
Most folks lining up to invest money with him thought that he was cheating in some way. However, folks assumed that he was involved with insider trading. No one expected that he was invovled in anything as simple as a Ponzi scheme...

It's interesting to watch the fall out from this one. Some very big philanthropic institutions just had their endowments completely wiped out.

[Al_U_Card]

hrothgar, on Dec 21 2008, 08:02 AM, said:

It's interesting to watch the fall out from this one. Some very big philanthropic institutions just had their endowments completely wiped out.

Like?

[mike777]

Yes, this is a very interesting story.

We ask where was the SEC but also where are the accountants and auditors. Not just the auditor of the fund itself but what due diligence did these huge multi million dollar investors do? Keep in mind these inst. investors paid out alot of money to people to do due diligence for them.

So much for putting all your eggs in one basket and then watching that basket like a hawk.

In a way this is what happened to the banks. Investors woke up one morning and asked, hmmm how much are your assets really worth? Can I trust the accountants, can I trust in such a basic document called your Balance Sheet?
OTOH is reminds me of the internet craze, balance sheet, who cares, cash flow statement who cares....let me in please......

[hrothgar]

Al_U_Card, on Dec 21 2008, 04:16 PM, said:

hrothgar, on Dec 21 2008, 08:02 AM, said:

It's interesting to watch the fall out from this one.  Some very big philanthropic institutions just had their endowments completely wiped out.

Like?

NEW YORK – One of the nation's leading educational philanthropies announced that it would close in the coming months, brought down by the alleged financial fraud orchestrated by Bernard Madoff.

Barbara Picower, who along with her husband, Jeffry, established the Picower Foundation in 1989, said in a statement on Friday that the foundation's grant-making would cease "effective immediately" and that it would "close its doors in the coming months."

She wrote in the statement that Madoff's "act of fraud has had a devastating impact on tens and thousands of lives as well as numerous philanthropic foundations and nonprofit organization."

Madoff is accused of swindling investors of $50 billion in a massive Ponzi scheme. He was ordered on Friday to remain in his Manhattan home under 24-hour surveillance and to hire security guards for protection.

The Picower Foundation has given millions to the Massachusetts Institute of Technology, Human Rights First and the New York Public Library. It also funded diabetes research at Harvard Medical School. It is based in Palm Beach, Fla., and has offices in New York.

The foundation, whose assets were managed by Madoff, said in its 2007 tax return its investment portfolio was valued at nearly $1 billion.

The foundation is by far one of the largest national philanthropic organizations to become mired in the financial mess created by Madoff's alleged scheme.

A smaller foundation, the JEHT Foundation, which supported numerous programs that aimed to reduce levels of incarceration and barriers to voting, announced it would close at the end of January. The foundation's donors had relied on Madoff to manage their funds.

[blackshoe]

hrothgar, on Dec 21 2008, 09:23 AM, said:

He was ordered on Friday to remain in his Manhattan home under 24-hour surveillance and to hire security guards for protection.

Madoff may in fact have hired private security guards, but if he did, it wasn't because he was "ordered" to do so.