$50 billion ponzie

[James48843]

So, Mr. Madoff had his Ponzie scheme going for quite some time.

Amazingly, those on the street were questioning "How can he do that, it doesn't make sense" back in 2001.

Read http://nakedshorts.typepad.com/files/madoff.pdf
this report from May of 2001, when his funds were reporting they were worth between 7 and 8 billion, and traders were questioning his published returns.

Unfortunately, in hindsight, someone should have picked up on it and looked further. But they didn't. And now they are saying the losses may be above 50 billion.

Oh, yeh- and I read somewere that he had an SEC audit since then too. But the SEC didn't find anything out of the ordinary. THAT should scare ya.

 

[JTH]

Like father like son. It would seem ol W has inherited his father's lack of talent for managing the economy. But hey we threw that witch Martha Steward in jail because she was such a threat to Wall street. :cheesy:

Thanks goodness we have term limits...

 

[Frixxxx]

Like father like son. It would seem ol W has inherited his father's lack of talent for managing the economy. But hey we threw that witch Martha Steward in jail because she was such a threat to Wall street. :cheesy:

Thanks goodness we have term limits...

And exactly how many times should the IRS audit your bank account?

I don't think you have a valid point on this one. It was the SEC's responsibility to fess up on what was going on here.

Oh, and can I remind everyone that the dot com failure was the product of the Clinton Administration. There was an EIGHT year separation between the father and son.

I really believe that this "good ol boy network" is to blame. If we want results and legal businesses, then enforce the laws.

 

[JTH]

If we want results and legal businesses, then enforce the laws.

That's exactly my point, W failed to manage. But don't worry I have plently of blame left over for the Democatic controlled congress too.

Still, W is the leader and you can't tell me he didn't see any of this coming. Instead he chose to try and pass the buck on to someone else.

 

[Mike]

The president's job isn't to "manage the economy".

The Fed apparently believed its job is to do that, and now we are seeing disastrous results of that misguided thinking (lowering interest rates too far and for too long creates a cheap lending environment which leads to lots of leveraging / bad risks taken which ultimately leads to bubbles and the inevitable popping of said bubbles).

I have the sinking feeling that we are in for hyperinflation whenever the economy finally pulls out of this deep recession. All that money the Fed pumped into the system will flood back into the economy when bankers regain confidence and start lending in earnest again.

 

[budnipper1]

Obama's "Coolers" for Wall Street

Thursday December 18, 11:01 am ET
Obama picks 3 financial regulators during unrelenting market turmoil

CHICAGO (AP) -- Rounding out his economic team, President-elect Barack Obama on Thursday named three veteran regulators to deal with unrelenting turmoil in the nation's financial markets and broader economy.

Obama said Mary Schapiro would chair the Securities and Exchange Commission, Gary Gensler would head the Commodity Futures Trading Commission and Daniel Tarullo would fill an empty Federal Reserve seat. All three will need to be confirmed by the Senate next year.

In announcing the appointments, Obama mentioned Wall Street money manager Bernard Madoff, saying that the latest investment scandal "has reminded us yet again of how badly reform is needed." The president-elect said his new team will help put in place new rules that will help "crack down on the culture of greed and scheming."
http://biz.yahoo.com/ap/081218/obama.html?.v=7

 

[fabijo]

Why are people so upset about the Madoff thing? You couldn't invest in it unless you had tons of cash. And if you have tons of cash, the ASSumption is that you are wise with your money and would only risk what you could afford to lose. And if you wanted to give your money to some guy but had no idea what he was doing, then that is up to you.

 

[turbo23dog]

Damm. I was hoping Obama was going to pick Jim Cramer for SEC. Cramer said several times he wanted the job and it seemed to me that he would know where to look to find the boyz playing games...

 

[wv-girl]

Damm. I was hoping Obama was going to pick Jim Cramer for SEC. Cramer said several times he wanted the job and it seemed to me that he would know where to look to find the boyz playing games...

Did you see Cramer last night? Had to laugh..says social security is the worlds largest ponzie scheme. Unfortunely, he is probably right.

 

[budnipper1]

Why are people so upset about the Madoff thing? You couldn't invest in it unless you had tons of cash. And if you have tons of cash, the ASSumption is that you are wise with your money and would only risk what you could afford to lose. And if you wanted to give your money to some guy but had no idea what he was doing, then that is up to you.

Avoiding Instant-Status Traps and the Bernie Madoffs Who Set Them
Beware of Schemers


In addition, it was status anxiety that propelled smart people to hand over enormous sums of money to Bernard Madoff without paying adequate attention to what he was doing with it.

"What strikes one about the investors in the Ponzi scheme is desperation -- and not necessarily desperation to become rich, but to earn status, honor, and esteem," Botton wrote me in an email. "If our position on the ladder is a matter of such concern, it is because how we feel about ourselves depends to an unfortunate degree on what others think of us.

"Except in societies where status is fixed at birth, our position on the ladder hangs upon what we achieve -- and success is uncertain," he continues. "And from failure will flow humiliation: a corroding awareness that we have failed to convince the world of our value and are henceforth condemned to consider the successful with bitterness and ourselves with shame. That's where Madoff came in: he promised an instant and painless release from these status anxieties."
http://finance.yahoo.com/expert/article/moneyhappy/129866

Damm. I was hoping Obama was going to pick Jim Cramer for SEC. Cramer said several times he wanted the job and it seemed to me that he would know where to look to find the boyz playing games...

Yeah, right...Cramer would be a good pick if you believe that the best way to find a crook is to use a crook to hunt him. :nuts:

 

[wv-girl]

The president's job isn't to "manage the economy".

The Fed apparently believed its job is to do that, and now we are seeing disastrous results of that misguided thinking (lowering interest rates too far and for too long creates a cheap lending environment which leads to lots of leveraging / bad risks taken which ultimately leads to bubbles and the inevitable popping of said bubbles).

I have the sinking feeling that we are in for hyperinflation whenever the economy finally pulls out of this deep recession. All that money the Fed pumped into the system will flood back into the economy when bankers regain confidence and start lending in earnest again.

That must be what Birch means when all the side-lined money floods the markets and causes the prices on stock to soar? Trick is we will all be spending money on everyday items with no $ for stocks.

 

[fabijo]

"And from failure will flow humiliation: a corroding awareness that we have failed to convince the world of our value and are henceforth condemned to consider the successful with bitterness and ourselves with shame.

Awwww. I feel so sorry for them.

 

[budnipper1]

Awwww. I feel so sorry for them.

Yeah, me too. My heart is bleeding...

 

[wv-girl]

Awwww. I feel so sorry for them.

It is a shame that the majority of people use the wrong yard stick.

 

[budnipper1]

Obama promises to bolster financial regulation
President-elect Barack Obama promised on Thursday to strengthen financial regulatory agencies and crack down on runaway "greed and scheming" in an effort to restore stability to a reeling U.S. economic system.

Obama named seasoned regulator Mary Schapiro to head the Securities and Exchange Commission and Gary Gensler to lead the Commodity Futures Trading Commission. The president-elect said he would charge them with leading broad financial regulatory reform.

"These individuals will help put in place new, common-sense rules of the road that will protect investors, consumers and our entire economy from fraud and manipulation by an irresponsible few," Obama told reporters in Chicago.

"These rules will reward the industriousness and entrepreneurial spirit that's always been the engine of our prosperity, and crack down on the culture of greed and scheming that has led us to this day of reckoning," he said.

Obama also named Georgetown University law professor Daniel Tarullo to fill one of two vacancies on the seven-seat Federal Reserve Board, which is battling to ease a credit crisis and fend off a deepening recession.

The SEC, created after the 1929 stock market crash to police markets and restore investor confidence, has come under heavy criticism after the Wall Street meltdown and financial scandals exposed lapses in its oversight.

The collapses of investment firms Bear Stearns and Lehman Brothers prompted scathing criticism from lawmakers who said the agency, charged with monitoring publicly traded firms, should have flagged the problems earlier.

Criticism has intensified with the $50 billion investment fraud -- one of the biggest in history -- allegedly carried out over many years by Bernard Madoff.

"We have been asleep at the switch. Not just some of the regulatory agencies, but some of the congressional committees that might have been taking a look at this stuff," Obama said.

Obama said regulatory reform would be one of his earliest initiatives and he would release a detailed plan on the regulatory changes. He said there was a need to potentially consolidate some regulatory agencies.
Under one scenario backed by some lawmakers, the SEC would be merged with the CFTC, which oversees the markets for commodities such as oil, coffee and sugar.

ENTER 21ST CENTURY
"We are going to have to greatly strengthen our regulatory apparatus, and update it from what worked for a 20th century financial system, so that it works in a 21st century financial system," Obama told reporters.
"I think the American people right now are feeling frustrated that there's not a lot of adult supervision out there," he said.

Schapiro is now chief executive of the Financial Industry Regulatory Authority, a self-regulatory body for the securities industry. She served as a SEC commissioner for six years, then became chairwoman of the Commodity Futures Trading Commission in 1994 during the Clinton administration.

Schapiro, a lawyer, is a member of the board of directors of Duke Energy Corp and Kraft Foods Inc. If confirmed by the Senate, Schapiro would replace SEC Chairman Christopher Cox, a Republican appointed by President George W. Bush.

Gensler was a partner at Goldman Sachs for a decade and was undersecretary of the Treasury in the Clinton administration.

Tarullo, Obama's choice for the Fed vacancy, was one of Obama's top economic policy advisers. The 57-year-old Tarullo was former President Bill Clinton's top adviser on international economic policy.

The announcements came as Obama, who takes office on January 20, aims to complete most of his Cabinet picks by the end of the week. He is due to leave on Saturday for a vacation in Hawaii with his family.
http://news.yahoo.com/s/nm/20081218/bs_nm/us_usa_obama_24/print
​

 

[Frixxxx]

Why are people so upset about the Madoff thing? You couldn't invest in it unless you had tons of cash. And if you have tons of cash, the ASSumption is that you are wise with your money and would only risk what you could afford to lose. And if you wanted to give your money to some guy but had no idea what he was doing, then that is up to you.

It's not this specific incident. The SEC reviewed them and found nothing. My concern is HOW MANY MORE are out there?

Usually, things like this are the TIP of the iceberg.:suspicious:

 

[poolman]

It's not this specific incident. The SEC reviewed them and found nothing. My concern is HOW MANY MORE are out there?

Usually, things like this are the TIP of the iceberg.:suspicious:

Exactly,

If you get caught you have done this whole time, whether it's stealing or other people are doing the same ponzi scheme with modification.

Loopholes, Don't we all look for them...

 

[CountryBoy]

Based on the definition of a Ponzi scheme, isn't Social Security the biggest one?

CB

 

[Show-me]

Or TARP. Or deficit spending.

 

[Frixxxx]

Based on the definition of a Ponzi scheme, isn't Social Security the biggest one?

CB

http://www.socialsecurity.gov/history/briefhistory3.html

On SS History.

But it's not a pure Ponzi scheme. It's mandatory participation. You have to pay in to get something. Or have a breadwinner pay in to recieve survivor benefits.