SERVING THE QUANTITATIVE FINANCE COMMUNITY

trackstar
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Joined: August 28th, 2008, 1:53 pm

### hedge fund ponzi scheme

I think he just selected pages from some very old books and stitched them together with gold thread.Popped a handsomely crafted Palm Tree country club logo on the cover and was off and running.
Last edited by trackstar on December 19th, 2008, 11:00 pm, edited 1 time in total.

fars1d3s
Posts: 451
Joined: August 14th, 2004, 12:28 pm

### hedge fund ponzi scheme

Madoff doesn't need the mansion in Palm Beach. He will soon have a new home, the prison. This means his posh apartment on Park Avenue and his beach home in Long Island will both be sitting empty. They should auction off all 3 and pay his victims.Besides, I hear the taxpayers will pay for his accommodation, room and board, in prison. He will always have shelter and food, and will never be hungry. This means the rest of his assets could go toward a victims' fund.

trackstar
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Joined: August 28th, 2008, 1:53 pm

One of the really interesting questions is - where is all the money?Those are luxury homes, but the visible total is low to mid tens of millions.There is a large fishing boat, not sure about private plane etc.And the distributions to past investors to keep the scheme going.But $50B?Might suspect that this gravy train had many cars, between the engine and the caboose. Last edited by trackstar on December 19th, 2008, 11:00 pm, edited 1 time in total. Traden4Alpha Posts: 23951 Joined: September 20th, 2002, 8:30 pm ### hedge fund ponzi scheme QuoteOriginally posted by: mackbarOne of the really interesting questions is - where is all the money?A big chunk of it was probably disbursed to investors over the years. Another big chunk was probably only accumulated imaginary paper profits. If you gave Madoff$1 million in 1998, he told you it earned 12% (but it didn't), 10 years later you think you've got a balance of $3 million but the$2 million in compounded gains never existed and your original \$1 million was paid out to other investors over that decade. And if the scam has been going on for very long (some say it could have started in the 1970s), then good chunks of the money have gone to people that have died, spent the money, or lost the money on subsequent investments. I wonder how many people or hedge funds borrowed money to invest in Madoff or used their Madoff balance as collateral for other deals.
Last edited by Traden4Alpha on December 19th, 2008, 11:00 pm, edited 1 time in total.

trackstar
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Joined: August 28th, 2008, 1:53 pm

### hedge fund ponzi scheme

I was thinking that and also, what if he parked some of the money with someone who (unbeknownst to him) was also running a ponzi scheme.It is like a Borges story - the Hedge Fund Hall of Mirrors.
Last edited by trackstar on December 20th, 2008, 11:00 pm, edited 1 time in total.

Posts: 23951
Joined: September 20th, 2002, 8:30 pm

### hedge fund ponzi scheme

Perhaps some earlier scam artist did start this in motion. Perhaps Madoff lost money on some scam and was too embarrassed to admit it. Perhaps he started fudging profits to cover one embarrassing loss and it all snowballed.Perhaps we shall see.

Paul
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Joined: July 20th, 2001, 3:28 pm

### hedge fund ponzi scheme

Various famous people/charities have lost money with Madoff, such as Spielberg, Zuckerman, the Wiesel Foundation. But, of course, assuming that this is a Ponzi scheme then there will be some other famous people who have made money. Anyone know any names? P

trackstar
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Joined: August 28th, 2008, 1:53 pm

### hedge fund ponzi scheme

Long piece by Diana Henriques (with a large team) of the NYT. It's a pretty good look at this stage of the game.Madoff Scheme Rippled Outward, Crossed Borders - NYT Dec 20

Alan
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### hedge fund ponzi scheme

Always a pleasure -- Natalie Angier --A Highly Evolved Propensity for Deceit

jomni
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### hedge fund ponzi scheme

Last edited by jomni on December 23rd, 2008, 11:00 pm, edited 1 time in total.

trackstar
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Joined: August 28th, 2008, 1:53 pm

### hedge fund ponzi scheme

The news on this just gets worse:A 'farewell from someone who did nothing wrong' - Guardian Dec 24

hamster
Posts: 216
Joined: October 12th, 2008, 3:51 pm

### hedge fund ponzi scheme

lesson learned (again): good reputation is not a substitute for classic due dilligence.

Cuchulainn
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### hedge fund ponzi scheme

QuoteOriginally posted by: mackbarThe news on this just gets worse:Cultish behaviour tends to spin out of control, sooner or later.heroes
Last edited by Cuchulainn on December 23rd, 2008, 11:00 pm, edited 1 time in total.
Step over the gap, not into it. Watch the space between platform and train.
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Cuchulainn
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### hedge fund ponzi scheme

QuoteOriginally posted by: AlanAlways a pleasure -- Natalie Angier --A Highly Evolved Propensity for DeceitI like this oneQuoteThe larger the average volume of a primate species neocortex  the newest, highest region of the brain  the greater the chance that the monkey or ape would pull a stunt like this one described in The New Scientist: a young baboon being chased by an enraged mother intent on punishment suddenly stopped in midpursuit, stood up and began scanning the horizon intently, an act that conveniently distracted the entire baboon troop into preparing for nonexistent intruders.
Step over the gap, not into it. Watch the space between platform and train.
http://www.datasimfinancial.com
http://www.datasim.nl

trackstar
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Joined: August 28th, 2008, 1:53 pm

### hedge fund ponzi scheme

Saw a nature program a few weeks ago on communication (and deception) in monkey tribes.In one case, a younger monkey gave a call for "Snake" and while everyone else scrambled for the trees, he grabbed a bunch of berries on the ground and ate them.Remind you of anything?