Madoff says losses of 50 Billion!

[brocklanders]

Quote from Signate67:

My guess is that the money was genuinely lost. In an attempt to make back money lost and not reported, it all just got out of hand.

I'm not so sure about this. I agree with you about the sons possibly knowing something and then turning him in as a cover but what is peculiar is that he was supposedly avoiding reporting requirements with the SEC by going all cash just prior to the reporting deadline. That means that if he was in legitimate positions he supposedly liquidated regardless of price.

Maybe that's what happened and caused the losses but in most Ponzi schemes the losses usually occur from funding lifestyles and paying back early investors and funding redemptions as they come in not in actual investments or trading losses. I doubt that he was ever actually trading much and was really just robbing Peter to pay Paul and using his name and status to further the scheme. It took a huge amount of redemptions all at the same time and no new money coming him to finally push in into a corner.

 

[ipatent]

Another question is why did Madoff admit that it was a Ponzi scheme? If the money was genuinely lost, that isn't criminal. You would think that any criminal in that situation would just blame the credit crisis and bad investments even if it was a Ponzi scheme to some extent. Hire good lawyers, shred the docs and make the Feds prove it was a Ponzi scheme.

No, there has to be some reason that Bernie is falling on his sword. He is sacrificing himself for some greater cause or purpose.

 

[trendlover]

Quote from brocklanders:

I'm not so sure about this. I agree with you about the sons possibly knowing something and then turning him in as a cover but what is peculiar is that he avoiding reporting requirements with the SEC by going all cash just prior to the deadline. That means that if he was in legitimate positions he supposedly liquidated regardless of price. Maybe that's what happened and caused the losses but in most Ponzi schemes the losses usually occur from funding lifestyles and paying back early investors not in actual investments or trading losses.

Madoff going to cash before deadline if he had positions would be guaranteed some loss in a bear market like you say. Now add to that big redemptions of the last year, add to that maybe not getting new investors to keep the scheme going. He had no option but to give up. I wonder if he started with good bets, good trading, but then made some big bet mistakes. And then this is when he used a ponzi scheme to cover his loss, became profitable again, and never stopped the scheme. So hard to believe a man who knew the money was invested in so many charitys would not care. He pick and choose his investors, why charitys?

 

[Cutten]

Quote from makloda:

I don't care so much about rich Swiss or Hamptonite HNWIs got their pompous asses handed to them but that charitable foundations with millions of Dollars lost their entire equity in this scam is really sad.

Any charity that invested their entire equity with one manager needs to have the trustees fired and then jailed.

 

[oddiduro]

Quote from tivthetrader:

In 2004, a fund of funds, allocated some money my way. I had great returns for about 9 months, i was up around 150% for the year. Had a real bad oct/nov, scrambled back in december, and ended up with a 96% return for the year.

Had a meeting with the fund of funds guy in January 2005 His risk guy was with him, and they were all over my case because my month to month returns were all over the place; eg, +30% one month, +20% a bunch of months, and then losing like 40% in the October November period. He said that I would never get real money from institutions till I lowered my overall returns and had consistent returns like the guy that he allocated the bulk of his fund of funds money to, Bernie Madoff.

I asked him what Madoff's return was for that year, and he said 38%. I said why would you want that instead of my 96%? He laughed and said, Madoff never makes him sweat, that he just grinds out winning quarter after quarter, year after year no matter what the market does, and that my results, while good overall, had too much risk day to day.

I never could understand how these guys that do what I do, selling strangles, straddles, and other combinations against stock or futures could have such a lack of volatility in their results, especially when the market spiked in one direction for a month or two straight like it did around the election in 2004. Now, I know how. You just have to make up your own results.

Gary, what do you think now?

It is very interesting that Richard Dennis had the same complaint when he tried to manage OPM.

 

[Landis82]

Quote from Cutten:

Why would you expect underpaid government bureaucrats to spot a fraud that many investors with hundreds of millions on the line did not? People at the SEC get paid a pittance, and they get no financial reward for unmasking gigantic fraud.

The Wall Street Journal reports this past weekend in their coverage of Madoff's fraud that Harry Markopolos, an industry executive first contacted the SEC in 1999 with his suspicions.

"Markopolos, who years ago worked for a rival firm, researched the strategy( employed by Madoff ) and was convinced that the results weren't real. 'Madoff Securities is the world's largest Ponzil scheme,' Mr. Markopolos wrote in a letter to the SEC. Mr. Markopolos pursued his accusations over the past 9 years, dealing with both the New York and Boston bureaus of the agency, according to documents he sent to the SEC that were reviewed by The Wall Street Journal."

Typical SEC.
Asleep at the wheel.
Cox and Linda Thomsen need to go to Prison.

 

[brokerboy]

Quote from trendlover:

Madoff going to cash before deadline if he had positions would be guaranteed some loss in a bear market like you say. Now add to that big redemptions of the last year, add to that maybe not getting new investors to keep the scheme going. He had no option but to give up. I wonder if he started with good bets, good trading, but then made some big bet mistakes. And then this is when he used a ponzi scheme to cover his loss, became profitable again, and never stopped the scheme. So hard to believe a man who knew the money was invested in so many charitys would not care. He pick and choose his investors, why charitys?

I am sure he started with go intentions. I think he was like the dumb guy in Europe. People keep giving him money and he figured maybe he would die before having to explain it. I am lost was it 50 billion in client money or was there margin from a third party?

 

[Pekelo]

Here is another question. Out of the 3 possible solution, why did he choose the worst?:

1. Suicede.
2. Giving himself up and go to prison.
3. Skip the country with 100 million.

#1 and #3 would have been my choice. Oh hell, OK, #3. Who the hell wants to die in prison when 70???

 

[nlslax]

Quote from Cutten:

Any charity that invested their entire equity with one manager needs to have the trustees fired and then jailed.

Absolutely correct. Read about one foundation this morning that fired staff and shut doors the day after hearing this. Cannot believe they put all their funds in one place - especially when they knew (or should have known) the assets were not held by an independant custodian.

Being wealthy is not the same as being smart.

 

[stock777]

For the thick headed amongst you I'll spell it out in childs language.

This is what happens when the science fiction of innocent until proven otherwise is allowed to fester , encouraged by liberal scum.

Any one entrusted with the funds of others SHOULD BE FORCED TO UNDERGO RIGOROUS VETTING AT RANDOM.

No exceptions. No excuses. No bullshit about black boxes and protecting proprietary methods.

If you won't subject your self to frequent , random, and extensive review, then MANAGE YOUR OWN FREAKING MONEY, not the publics.

Our regulatory agencies have proven to be nothing but inept , bungling , idiots.