Madoff: World's Biggest Swindle!

[3113]

Just when you thought it was safe to go back into the Hedge Fund...

Some of America’s wealthiest socialites were facing ruin last night after the arrest of a Wall Street big hitter accused of the largest investor swindle perpetrated by one man. Shock and panic spread through the country clubs of Palm Beach and Long Island after Bernard Madoff, a trading powerbroker for more than four decades, allegedly confessed to a fraud that will cost his wealthy investors at least $50 billion – perhaps the largest swindle in Wall Street history.

Mr Madoff, 70, a former Nasdaq stock chairman, was apparently turned in by his two sons and arrested on Thursday morning at his Manhattan apartment by the FBI. Andrew Calamari, a senior enforcement official at the US Securities and Exchange Commission, described the scheme as “a stunning fraud that appears to be of epic proportions”.

The FBI’s criminal complaint states that when two federal agents arrived at Mr Madoff’s apartment, he told them: “There is no innocent explanation.” The agents say that he told them “he paid investors with money that wasn’t there”, that he was “broke” and that he expected to go to jail. Many of his investors came from the enormously wealthy enclaves of Palm Beach, Florida and Long Island, New York, where people had invested billions in Mr Madoff’s firm for decades....

The FBI claims that three senior employees of Mr Madoff’s investment firm turned up at his apartment on Wednesday to ask questions about the company’s solvency. Two of them are believed to be his sons, Andrew and Mark, who have worked for their father for two decades. Mr Madoff told them that he was “finished”, that he had “absolutely nothing”, and that “it’s all just one big lie”. He said the investment arm of his firm was “basically a giant Ponzi scheme”, and that it had been insolvent for years.

Rest of this story here.

And if you thought you were safe overseas from this guy:

SWISS private banks are estimated to have lost at least £2.5 billion in Wall Street veteran Bernard Madoff’s alleged $50billion (£33 billion) fraud. The scandal has been growing since Madoff was arrested last week...Many of the world’s richest families are embroiled in the saga. Fred Wilpon, owner of the New York Mets baseball team, and J Ezra Merkin, chairman of the car finance giant GMAC, are among dozens emerging as the victims of Madoff’s scheme. A number of wealthy Britons are expected to be hit through exposures to investments in Switzerland. Union Bancaire Privée, the Geneva-based private bank, is estimated to have lost about one billion Swiss francs (£570m) in Madoff funds....Larger institutions are also believed to be affected, including Santander, the owner of Abbey, and BNP Paribas. Royal Bank of Scotland confirmed last night that it has some exposure to Madoff and is now investigating its position.

Rest of that article here.

Is it me or does it seem like America's been economically snowballing downhill (dragging the world behind it) for the last three months? I mean it's just one outrageous financial bit of madness after another. It seems like the only people who will be alive and well after the dust clears are the survivalists who decided to go off the grid and live out in the woods!

 

[JAMESBJOHNSON]

A Fool And His Money......

 

[3113]

And here's the latest!

Europe's biggest bank, HSBC, joined a list of top names in world finance admitting huge potential losses on Monday in a suspected pyramid fraud scam run by ex-Wall Street heavyweight Bernard Madoff. Shares in Santander, the biggest bank in Spain and the second-largest in Europe after HSBC , plunged after the lender said it had an exposure of more than three billion dollars to Madoff Investment Securities in New York. And Fortis Bank Netherlands said it stood to lose up to a billion euros in the suspected scam, even though it had no direct exposure to Bernard Madoff Investment Securities LLC.

Rest of the article here.

I hope none of our European AHers had any of their spare millions in any of these banks.

 

[rgraham666]

Time for the theme song of the financial world.

 

[dr_mabeuse]

Even if it was a Ponzi scheme, how in the world do you lose 50 billion dollars? What do you spend it on? Wine, women, and song? Penthouse apartments? Where'd it go?

Presumably he made a bunch of bad investments, but 50 billion dollars' worth?

 

[R. Richard]

Even if it was a Ponzi scheme, how in the world do you lose 50 billion dollars? What do you spend it on? Wine, women, and song? Penthouse apartments? Where'd it go?

Presumably he made a bunch of bad investments, but 50 billion dollars' worth?

I have followed the Madoff scandal in some detail. The problem lies with Madoff himself.

What a stock trader does, is he comes in early in the morning and he [and his people] works his computer trading station all day. The traders use experience and skill to adjust to the dynamic situation that the market presents. The job is a tough one and requires concentation and comittment at critical times.

What Madoff did was to come in at the 'boss time' and talk to his friends and customers. He set up a trading strategy and let things run on automatic. He couldn't let employees trade for him, or they would see how bad things were. Madoff was an ego running wild and many, many people will pay for what he did.

Madoff lived very well, but not $50 billion well. He spent millions, but his stupidity and ego lost billions.

 

[3113]

Madoff lived very well, but not $50 billion well. He spent millions, but his stupidity and ego lost billions.

So it was all lost on bad stock trades? How long did this go on and why did no one get wind of it?

 

[JAMESBJOHNSON]

3113

Surprise! Surprise!

No one got wind of it because Regulators are either incompetent or criminals, too.

The BIG losers in the whole financial meltdown will be business school grads....especially the Ivy League hot shots.

 

[trysail]

Even if it was a Ponzi scheme, how in the world do you lose 50 billion dollars? What do you spend it on? Wine, women, and song? Penthouse apartments? Where'd it go?

Presumably he made a bunch of bad investments, but 50 billion dollars' worth?

Zoot, the green eyeshade folk are still toting the bill. Don't believe everything (anything?) you read in the media. For the moment, you should consider $50 billion as a figment of the media's vivid imagination and never-ending efforts to attract eyeballs.

People are incredibly stupid. It never ceases to amaze me just how stupid they are. I listen to these stories of why people chose to invest dough with Madoff and I find myself shaking my head in disbelief. It's beyond my comprehension; they invested with Madoff because they heard his name whispered; they invested with Madoff because he was Jewish; they invested with Madoff because he was a member of Palm Beach Country Club; they invested with Madoff because... What a bunch of fucking gullible sheep! How could anybody be so stupid?

I'll tell you one thing— I don't want to hear a single goddamn word of whining from these people about being reimbursed for their own stupidity.

Basically, what has happened over the last thirty years is that the investment field was invaded by a bunch of people who have no business handling other people's money— it's become ALL salespeople. Integrity and competence became professional handicaps; if you were honest and competent, they threw you out. It became impossible for "honest" people to remain.

Once upon a time, the head of one of the country's largest trust departments (a fiduciary, mind you!) said to me, "A fool and his money SHOULD be parted." I was appalled. That kind of mindset was the antithesis of everything I stood for. Then again, I have to admit that when I see the mindless idiocy of the people who put all their eggs in one basket with Madoff, there's a part of me that says to myself: They got what EXACTLY what they deserved.

Vanguard, Vanguard, Vanguard.

 

[WRJames]

Even if it was a Ponzi scheme, how in the world do you lose 50 billion dollars? What do you spend it on? Wine, women, and song? Penthouse apartments? Where'd it go?

Presumably he made a bunch of bad investments, but 50 billion dollars' worth?

Maybe this is the answer?

For all we know he was funding terrorism of some ilk.

 

[Pure]

hooray

the free unregulated market will always turn up talents like madoff. as ronald reagan promised, the issue is to get the *government's* hand out of your pocket.

as try said,

Then again, I have to admit that when I see the mindless idiocy of the people who put all their eggs in one basket with Madoff, there's a part of me that says to myself: They got what EXACTLY what they deserved.

mindless nanny staters will whine over the sheep, instead of embracing a breath of fresh air. can anyone tell me why alleged 'ponzi schemes'--relying on the influx of new investors-- should be illegal? will a cop be beside me saying 'don't give over your money to someone promising the golden gate bridge'?

after a year in a spa-prison, madoff will be hosting parties in his caribbean holdings. all libertarians invited! three cheers for freedom!

 

[rgraham666]

I've heard it said the the stock market itself pretty much amounts to a Ponzi scheme. Not sure if I believe it but the market does exhibit much of the same behaviors.

 

[voluptuary_manque]

I've heard it said the the stock market itself pretty much amounts to a Ponzi scheme. Not sure if I believe it but the market does exhibit much of the same behaviors.

No, it's Social Security that's a Ponzi scheme. If anyone but the government was running it, they'd get put in jail. I know, I used to work for the bloody agency!

 

[JAMESBJOHNSON]

PURE

Liberals always globalize local problems.

If a raindrop falls on you, the sky must be falling.

ROB

Close analogy. But it seems like a raffle to me.