The Seduction of Smooth Returns

[chiku85]

Interesting article i came across..

The recent case of Bernie Madoff, former chairman of NASDAQ, accused of running the biggest Ponzi scheme in history, has no doubt, sent tremors throughout the financial markets. The sheer enormity of the scam, to the tune of USD$50 billion, is mind-boggling.

How did wealthy, sophisticated, individuals, professionals in their own right, and occupying prominent positions in the highest echelons of society succumb to such duplicity?
The single, overriding factor that made Madoff's investment vehicles attractive was the metronomic uniformity in their performance. One of his funds, Fairfield Sentry Ltd., reported annual returns of between 8 percent and 18 percent every single year. Now we know it was all a facade. The US government says Madoff was paying off early investors with the funds incoming from later investors.

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[ksl]

Reminds me of a DJ in Denmark loaning from one bank to pay another, he succeeded for many years before going on the run! Con artist's are every where! Although 50 billion must have been well worth the trouble, what do you do with harmless psycho's, that get carried away?

[pakjohn]

How did wealthy, sophisticated, individuals, professionals in their own right, and occupying prominent positions in the highest echelons of society succumb to such duplicity?

Two human traits come to mind; arrogance and greed. I know there are exceptions where really good people lost money because they bought into a very well disquised scam, but the big investors bought in because they were invited into the "inner circle" of investors, in my opinion.

Thats the problem with a wealth system that allows people to amass fortunes with out ever actually producing anything.

[sundaymorningstaple]

Our friend chiku85 thinks he is a sly bugger. Unfortunately he needs to get up very early in the morning to outfox the farmboy. Two posts, and I already warned him in the first one. Now he brazenly hyperlinks his site. The first time he "just gave credit to his source"

Sorry guy, but you've been sussed out.