This is a little above my head in all honesty. I mean I understand what is happening, what Madoff did, and why he did it. Money. I just don;t understand how people would not watch their money to see what was going on with it.
By
Greg Newton
Chicago derivatives consultant Janet Tavakoli once again valiantly suppresses the urge to bite her tongue:
The Wall Street Journal missed a golden opportunity (“Top Broker Accused of $50 Billion Fraud,” December 12, 2008). It wrote that if Madoff’s alleged losses exceeded $50 billion, it would “dwarf past Ponzi schemes.” Yet, Madoff is a piker.
The largest Ponzi scheme in the history of the capital markets is the relationship between failed mortgage lenders and investment banks that securitized the risky overpriced loans and sold these packages to other investors — a Ponzi scheme by every definition applied to Madoff. These and other related deeds led to the largest global credit meltdown in the history of the world...
Schadenfreudically speaking, one of the larger “victims” of Madoff’s plundering is, according to various news reports, J. Ezra Merkin. His Gabriel Capital Group’s Ascot Partners hedge fund had “substantially all” of its $1.5 billion or thereabouts riding on Madoff, resulting in “major losses” for Merkin “as one of the largest investors” in Ascot, according to his tear-stained investor letter.
Among Merkin’s hobbies (so far): chairman of GMAC LLC, the all-but-bankrupt Cerberus-GM finance subsidiary currently, and to date unsuccessfully, grovelling for bank holding company status that would allow it to gorge at the taxpayer-financed troughs so freely offered mostly to institutions whose failure would inconvenience Goldman Sachs (GS). GMAC, of course, ranks high in the, admittedly long, list of nominees for Ground Zero of “the largest Ponzi scheme in the history of the capital markets.”
Madoff Deserves Lots of Company
by Janet Tavakoli
Tavakoli Structured Finance Dec. 13 2008
For Madoff investors, big* returns trumped concerns
AP via Chicago Sun-Times Dec. 12 2008
* At the risk of being even more of a pain in the ass than usual, NakedShorts would like to point out to the grown-up meejuh in general, and specifically its headline writers, that “big” returns were not the point. The con credibility factor was the — cough — incredibly consistent, non-volatile, returns.
Fund Fraud Hits Big Names
by Robert Frank, Peter Lattman, Dionne Searcey and Aaron Lucchetti
The Wall Street Journal Dec. 13 2008
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