4 ms·

> clients entrusted him with more than $19 billion in principal > Irving Picard, the trustee appointed to unwind the accounts, had recovered more than $14.3 bi

by breck 6y ago

> clients entrusted him with more than $19 billion in principal > Irving Picard, the trustee appointed to unwind the accounts, had recovered more than $14.3 billion Wait WHAT?? That's only a 25% loss. Not the 100% loss I assumed. Does anyone know more?

zatertip 6y ago
principal -- they probably thought their accounts were worth considerably more due to accumulated returns.
- mumblemumble 6y ago
  Matt Levine recently observed, when talking about another Ponzi scheme, that it would be nice if newspapers would quote the net and not just the gross. Though that wouldn't tell the whole story, either. You would have the earnings of people who managed to get out of the scheme before it collapsed offsetting the losses of those who didn't. You're also not taking into account the opportunity cost of having that money in the Ponzi scheme instead of, say, VTSMX.
gruez 6y ago
That's not too surprising. Matt Levine wrote about the recent 1inMM ponzi scheme recently[1] and the scammer's "take" was only 10%. It makes sense if you think about it. For a ponzi scheme to work you need to constantly circulate cash (from new investors to old investors), so it's hard for you to take a lot without collapsing the whole scheme. [1] https://www.bloomberg.com/opinion/articles/2021-04-08/archegos-got-too-big-for-its-banks https://www.bloomberg.com/opinion/articles/2021-04-08/archeg...
Gustomaximus 6y ago
does this account for time? They might get their $10m back but if they invested it anywhere else it would be $30m now and inflation has eaten a chunk. I do know some people that pulled their fund before the collapse had their gains taken back to the principal amount.
darig 6y ago
> Does anyone know more? Yes. It is very hard to spend $19 billion.
deleted 6y ago
[deleted]

4 ms·

> clients entrusted him with more than $19 billion in principal > Irving Picard, the trustee appointed to unwind the accounts, had recovered more than $14.3 bi

by breck 6y ago

zatertip 6y ago
principal -- they probably thought their accounts were worth considerably more due to accumulated returns.
- mumblemumble 6y ago
  Matt Levine recently observed, when talking about another Ponzi scheme, that it would be nice if newspapers would quote the net and not just the gross. Though that wouldn't tell the whole story, either. You would have the earnings of people who managed to get out of the scheme before it collapsed offsetting the losses of those who didn't. You're also not taking into account the opportunity cost of having that money in the Ponzi scheme instead of, say, VTSMX.
gruez 6y ago
That's not too surprising. Matt Levine wrote about the recent 1inMM ponzi scheme recently[1] and the scammer's "take" was only 10%. It makes sense if you think about it. For a ponzi scheme to work you need to constantly circulate cash (from new investors to old investors), so it's hard for you to take a lot without collapsing the whole scheme. [1] https://www.bloomberg.com/opinion/articles/2021-04-08/archegos-got-too-big-for-its-banks https://www.bloomberg.com/opinion/articles/2021-04-08/archeg...
Gustomaximus 6y ago
does this account for time? They might get their $10m back but if they invested it anywhere else it would be $30m now and inflation has eaten a chunk. I do know some people that pulled their fund before the collapse had their gains taken back to the principal amount.
darig 6y ago
> Does anyone know more? Yes. It is very hard to spend $19 billion.
deleted 6y ago
[deleted]