4 ms·

There's a kind of kudos in having been able to fool so many apparently savvy investors for so long, I guess. Most people of this type - which includes some ver

by motters 16y ago

There's a kind of kudos in having been able to fool so many apparently savvy investors for so long, I guess. Most people of this type - which includes some very successful non-criminals too - seem to have the characteristic of being completely unconcerned about the victims (or "customers"), instead just seeing what they were doing as a demand and supply issue.

hga 16y ago
Well ... the really savvy ones knew he was running a scam, they just thought he was using profits from front running (http://en.wikipedia.org/wiki/Front_running http://en.wikipedia.org/wiki/Front_running) in his other business to even out the returns of the fund. They didn't think he was so much a crook that it was instead all a Ponzi scheme.
- rbanffy 16y ago
  > Well ... the really savvy ones knew he was running a scam, When you knowingly invest in a Ponzi scheme (or something like it) you are enabling it and you should be considered an accomplice. It would be hard do prove in a criminal case, but there should be regulations to prevent the investors who should know better and who got handsome returns for enabling him to enable other similar schemes in the future.
  - rbanffy 16y ago
    Sometimes I think I stepped into a moderation distortion zone...
  - hga 16y ago
    Then you'll be happy to know that those who received (bogus) returns from the fund are subject to clawbacks, since the money they received wasn't really from a return on their investment but was stolen from other investors. You ... scheme would be hard to justify given that the SEC received so many detailed reports that Madoff was doing something impossible and just blew them off.
    - anamax 16y ago
      > the SEC received so many detailed reports that Madoff was doing something impossible and just blew them off. Regulators should have "skin in the game". Heck - politicians too. But, Barney "Fannie and Freddie are sound" Frank will be re-elected.
      - hga 16y ago
        Maybe, but I can't think of any way to make that work. A lot of politicians have been and will be losing their seats for following the lead of Barney "let's roll the dice" Frank. He's in a well gerrymandered seat (in the state that invented the process!) so he's likely to stay indefinitely, but who knows if the economy gets bad enough (e.g. http://news.ycombinator.com/item?id=1410594 http://news.ycombinator.com/item?id=1410594). One big factor here is that the whole situation has been thrown in flux with Ted Kennedy's death. He was the big "bring home the bacon" guy, there's no one last time I checked who's stepping into that role. E.g. Kerry doesn't have what it takes.
        anamax 16y ago
        > Maybe, but I can't think of any way to make that work. Neither can I. If the good people of Mass want to keep electing him, there's not much that the rest of us can do. > "bring home the bacon" guy Supposedly pork actually kills jobs in the recipient's district. http://www.washingtonexaminer.com/opinion/Harvard-study-shows-earmarks-cost-jobs-95637114.html http://www.washingtonexaminer.com/opinion/Harvard-study-show... Another approach, which won't ever happen because of the social dynamics, is for his fellow legislators to punish his district. The theory being "we can't make you elect someone else, but we can make you wish that you had". However, legislators don't work that way.
JoeAltmaier 16y ago
Con games, to work, require greedy victims.

by motters 16y ago

hga 16y ago

Well ... the really savvy ones knew he was running a scam, they just thought he was using profits from front running (http://en.wikipedia.org/wiki/Front_running http://en.wikipedia.org/wiki/Front_running) in his other business to even out the returns of the fund. They didn't think he was so much a crook that it was instead all a Ponzi scheme.

rbanffy 16y ago
> Well ... the really savvy ones knew he was running a scam, When you knowingly invest in a Ponzi scheme (or something like it) you are enabling it and you should be considered an accomplice. It would be hard do prove in a criminal case, but there should be regulations to prevent the investors who should know better and who got handsome returns for enabling him to enable other similar schemes in the future.
- rbanffy 16y ago
  Sometimes I think I stepped into a moderation distortion zone...
- hga 16y ago
  Then you'll be happy to know that those who received (bogus) returns from the fund are subject to clawbacks, since the money they received wasn't really from a return on their investment but was stolen from other investors. You ... scheme would be hard to justify given that the SEC received so many detailed reports that Madoff was doing something impossible and just blew them off.
  - anamax 16y ago
    > the SEC received so many detailed reports that Madoff was doing something impossible and just blew them off. Regulators should have "skin in the game". Heck - politicians too. But, Barney "Fannie and Freddie are sound" Frank will be re-elected.
    - hga 16y ago
      Maybe, but I can't think of any way to make that work. A lot of politicians have been and will be losing their seats for following the lead of Barney "let's roll the dice" Frank. He's in a well gerrymandered seat (in the state that invented the process!) so he's likely to stay indefinitely, but who knows if the economy gets bad enough (e.g. http://news.ycombinator.com/item?id=1410594 http://news.ycombinator.com/item?id=1410594). One big factor here is that the whole situation has been thrown in flux with Ted Kennedy's death. He was the big "bring home the bacon" guy, there's no one last time I checked who's stepping into that role. E.g. Kerry doesn't have what it takes.
      - anamax 16y ago
        > Maybe, but I can't think of any way to make that work. Neither can I. If the good people of Mass want to keep electing him, there's not much that the rest of us can do. > "bring home the bacon" guy Supposedly pork actually kills jobs in the recipient's district. http://www.washingtonexaminer.com/opinion/Harvard-study-shows-earmarks-cost-jobs-95637114.html http://www.washingtonexaminer.com/opinion/Harvard-study-show... Another approach, which won't ever happen because of the social dynamics, is for his fellow legislators to punish his district. The theory being "we can't make you elect someone else, but we can make you wish that you had". However, legislators don't work that way.

JoeAltmaier 16y ago

Con games, to work, require greedy victims.