200 Years of Losses?
Dec 22, 2008
Posted by Jody Eisenman | Filed under fraud
In calculating Bernie Madoffs’ self admitted $50 billion in losses, I came up with the following:
Assuming 250 trading days per year, and a staggering $1million in losses per day, it would have taken Madoff 200 years to lose $50 billion. In connection with this massive fraud, I have included a link to an incredible document, namely, Harry Markopolos’ written complaint to the SEC in 2005. http://d.scribd.com/docs/1xze9pjljc8zx53bbsbj.pdf
Although it is 19 pages, I would suggest reading it to get a critical view of Madoffs’ strategy. In the complaint, Markopolos lists 29 red flags and states on page 2 of the document that it is highly likely that “Madoff Securities is the Worlds’ Largest Ponzi Scheme”. As we now know, the SEC chose to completely ignore this and any other complaints about Madoff even though according to Bloomberg, the misconduct dates back over 30 years. http://www.bloomberg.com/apps/news?pid=20601087&sid=aj44JrWmAOGA&refer=home
I think much of the investing world is transfixed by this incredible story.
In other news, it seems that the auto industry will receive over $13 billion in loans. It is not immediately clear how and under what terms these loans will be repaid. Thus far, other than emergency assistance, it is difficult for me to see any real improvement in our economy. Banks are still not making loans and investors are still shying away from fixed income investments that are not government guaranteed. I do not see how our country could avoid a severe economic meltdown unless this situation improves soon.
