to the trading floor which was stocked with computers. But no one was
there....just computers. Madoff made some clever excuse ....
Bernie said, "Gee, they were here a minute ago."
Posted on 01/15/2009 6:30:54 AM PST by marshmallow
Not BANK, but BUNCO! BUNCO is not insurable!
BTW, the market's down 2.0% to 2.5% today ~ every major index.
Then it stopped going down.
Guys started buying stuff like crazy. Then they stopped doing that.
We may have hit rock bottom for the day ~ just like yesterday.
EXCERPT There were several things that alerted some in the hedge-fund industry that an investment with Madoff may not have been as safe as it initially appeared. Aksia LLC, which researches hedge funds and advises institutions about investing in the industry, said that it never recommended that clients put money in some of the "feeder funds" that allocated their capital to Madoff. On the surface, these feeder funds looked like institutional-quality vehicles, but there were "a host of red flags," Aksia Chief Executive Jim Vos and colleague Jake Walthour wrote in a letter to clients after the Madoff scandal erupted last week.
The funds were marketed as using a "split-strike conversion" investment strategy that is "remarkably" simple, but the returns it purportedly generated could not be replicated by Aksia's quantitative analyst, Vos and Walthour wrote.
The Madoff funds supposedly traded in the Standard & Poor's 100 index options market, but that market is relatively small and may not have been able to handle trading by vehicles with roughly $13 billion in assets, they said. The feeder funds had almost all their assets custodied with Madoff Securities, the brokerage unit of Madoff's firm.
Aksia checked into the auditor of Madoff Securities and discovered it was a firm called Friehling & Horowitz, which had three employees -- one of whom was 78 years old and another was a secretary. The firm's office in upstate New York was 13 feet by 18 feet.
Madoff's Web site claimed the firm was technologically-advanced, but it sent paper confirmations of trades via US mail at the end of each day, rather than providing electronic access to this important information.
Paper copies provide a hedge-fund manager with the end-of-the-day ability to manufacture trade tickets that confirm the investment results.
That proves Bernie is even more of a rat than some supposed. It shoots down the theory that he started out honest, got in over his head, and adopted his Ponzi scheme out of desperation to stay in business and save his reputation.
Of course, his scheme did not require trading irregularities in any case. Merely disastrous trading losses that needed to be hidden from clients! But it's certainly easier to work a Ponzi if you aren't losing later investments in the market before you can pay them as returns to earlier investors.
Also, one has to wonder why other employees at his firm didn't wonder how the trades were getting done.
He really was operating like the 1980s ~ and I bet that "trading floor filled with computers" was simply a room full of DEC PRINTERS ~ set those suckers printing all day long, what a racket ~ Odds are he simply stacked and packed the printouts and ran them through again ~ maybe without RIBBONS.
I had only one of those DEC critters (shown above). It could print like crazy.
Only on paper. My guess is he took in a billion or two and pretended that it grew to 50B. Along the way he also paid out some. But with the returns he claimed, he got to 50B on paper rather easily.
Dear Boston Globe...the guy was a THIEF! Why in hell would he want to spend any of the money he was interested only in STEALING, on trades??!! What would the point be??!!
Trades or no trades, we know from the basic laws of economics that this money is not created from vapor, nor does it return to vapor. If $50 Billion is missing, where did it go? Who has it?
All we hear in all this financial crises mess is that money is missing, where did it go? Who has it? Go get it. Put it back where it belongs. Forget the bailout. What is this wallstreet jazz? There is limited numbers of stock. One sells the other buys. It does not vaporize, someone is holding the sheet of stock and someone else is holding the money. Do they think we are that stupid?
That's how it grew to $50 billion not doubt. The guy had been running this scam for 20 years or so.
This would be the broker-dealer run by his sons, who had no idea anything was amiss.
Clearly, he was under zero suspicion until that happened, and if he had another fifteen to twenty years of life left, he could have figured out how to flee and leave no trace. He surely had to be thinking about how the end game would turn out, and possibly made some tentative plans that we have yet to discover. But then his family would have been hounded to death by the authorities, and this was his way of tying up all the loose ends for them.
Clearly, he had help from the crooked CPA firm in New City, NY, the little three person hole-in-the-wall operation with one retired partner permanently in Florida, and just a secretary to answer the phones. You take that remaining guy, and squeeze his gonads enough, and you'll find out the full truth on Bernie Madoff.
But by that time, Bernie will be dead of natural causes, his last days spent in his penthouse surrounded by the luxury of his ill-gotten goods. While we can take those things away, and maybe even confiscate everything he's passed on to his family, we cannot restore the trust that was lost when we heard that even very sophisticated people were fooled by a con man with paper and ink.
None of us can ever believe any of our financial statements again. It really could happen to us, it's just a matter of the chutzpah of the people we've entrusted with our money.
Bernie said, "Gee, they were here a minute ago."
I think he told his sons to turn him and save themselves. I suspect there are some very large offshore accounts to which they have access.
Some of those offshore accounts could be decades old.
The idea that his sons had no knowledge of the fraud is risible.
You would need a fairly fancy computer app to crank out copious statements month after month and have them
You can see an actual statement here. It looks like it was printed on an IBM 1403 line printer or similar. Those went out of style in the early 80's, when most statement producers switched to laser printers.
Take that B of A buy of 2280 shares on 11/12 at 21.59. Now google BAC and check it out for that date. On the 11th it closed at 18.69, on the 12th at 17.00, and on the 13th at 17.10. Why would Bernie have bought $4 high when the goal is to buy low? Could it be that the numbers are just numbers?
Nice commission, too ($91). Fidelity only charges $8.
Wow... is that an impact printer?
wrong!, we the people are responsible for having allowed our government to become so CORRUPT.....so we suffer until we take it back!!
“....just pay bribes”
BINGO!!!!And he paid them right up to ‘Ole Hillary herself...which is why she’s so eager to duck out to State....
However, this past president of NASDAQ and pillar of the financial and NYC community was thought to be beyond reproach so when the SEC looked at the cooked books in what must have been a cursory manner, everything seemed fine.
How can anyone be held responsible for losing money, whether it be with Madoff, the Stock market, or other bad investments?
See how Bank of America will be getting billions more in Taxpayer funds because their purchase of Merrill Lynch didn’t go as well as they had hoped?
How can you bail out some companies and people, but not others? Where is the consistency?
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