Obama Citizenship

Hedge Fund Manager Another Symptom of ?Easy Money?

By Phil

The Independent provides us with a great example of what has historically come to be known as “Ponzi schemes:”

Mr [Bernard] Madoff confessed last week that his business was “all one great big lie”. The investment returns were fake, and he had been paying old clients with money from new ones. In its conception, the scam is a classic. In its size, it is breathtaking, eclipsing anything seen before. He personally estimated the losses at $50bn, according to the FBI, and as investors owned up to their exposure yesterday that did not seem impossible. For 48 years, until Thursday morning, Mr Madoff was one of Wall Street’s best-respected investment managers, able to harvest money from a vast network of contacts and to trade on his name as a former chairman of the Nasdaq stock exchange.

His arrest has further shaken confidence in the barely regulated hedge fund industry, which is already suffering some of the worst times in its short history. Mr Madoff ? who is now on a $10m bail and under orders not to leave the New York area ? was able to operate his fraud under the noses of regulators for many years.

It is said that Mr. Madoff claimed to be making upwards of 14% on his fund while everyone else has been losing up to 40% on their investments. It is also being reported that many charities are especially hit hard and there could be some government intervention (go figure) for those who fell victim to how he sold his services (as opposed to actually checking out what he was selling; sounds a lot like what’s happened with Barack Obama, no?).

OK, class — a question for you. What is currently the world’s larget Ponzi scheme that has been given moral legitimacy?

Wait for it — say it with me — Social Security! That’s right! Those of us who are on a payroll automagically send monies not to some “lockbox” government account with our name on it, but rather, directly to a recipient of our tax dollars.

There’s a lot of power in Washington behind this largest Ponzi scheme the world has ever seen. And we have even made it into a moral issue since the 1930s!

-Phil

Full post as published by The Right Side of Life on December 15, 2008 (boomark / email).