[steve86]

Before this wave of redemptions Madoff was doing great because his “investors” rarely took money out. They plowed their dividends back in because it was such a great deal growing 12% each year ...on paper

Yes, but "on paper" had a different meaning here than it normally does. At least with Fidelity Investments, say, the portfolio is really worth what the paper statement says at that point in time (I hope).

[dennisw]

Right..... On paper means two different things here.

But for sure, all the Madoff investors had were “paper profits”