Reliable info on what he was thinking would have to be straight from the Madoff's mouth, and I'm sure his lawyer would advise him against that.
My guess: I suspect he didn't start his investment business intending to create a Ponzi scheme, but got there by small, fraudulent stages, by letting himself "touch up" the books during a disappointing quarter, thinking he'd fix it up later, when his genius really started raking in the big returns. Later, when the "I'm a genius" plan didn't work so well, but the Ponzi scheme was purring along smoothly, he just went with what was working for him.
― Aimless, Wednesday, 17 December 2008 19:01 (fifteen years ago) link
I loled while on the treadmill today when CNN showed old footage of Madoff talking about how govt regulation made cheating on Wall St. virtually impossible and that the general public didn't really understand this simple fact.
― riper ethnic cauldrons (dan m), Wednesday, 17 December 2008 19:02 (fifteen years ago) link
Later, when the "I'm a genius" plan didn't work so well, but the Ponzi scheme was purring along smoothly, he just went with what was working for him.
― Aimless
Plus, once that sort of thing is going, and you've got more money on the books than you actually have invested, how do you get off the ride? I suppose you keep hoping for a big quarter to even things out, and maybe it eventually comes, but I'd imagine that the sort of person who'd dig that kind of hole once would happily do it twice. So you have ups and downs, periods of success and periods of near catastrophic failure, and through it all, you reassure yourself that your "financial genius" will finally see you through. And if not, well, at least it was a hell of a ride. Shit it seems to have worked just fine for decades...
― Suggest Ban Permalink (contenderizer), Wednesday, 17 December 2008 19:50 (fifteen years ago) link
yah thats pretty much what i figured - still v much looking forward to a thorough post mortem
― ice cr?m, Wednesday, 17 December 2008 19:55 (fifteen years ago) link
http://images.huffingtonpost.com/gadgets/slideshows/735/slide_735_13964_large.jpg
this guys some sort of psycho
― ice cr?m, Wednesday, 17 December 2008 22:00 (fifteen years ago) link
so is anybody on here getting ritholtz's book?
― TOMBOT, Friday, 19 December 2008 05:33 (fifteen years ago) link
if it's going to be a logistical beatdown about how united states is becoming "socialist" then no; if it's going to be three-paragraph chapters with links to actual reporting, then yes
sorry, i love ritholtz but damn
― Tracer Hand, Friday, 19 December 2008 10:15 (fifteen years ago) link
The Real Great Depression
― La plus perdue de toutes les journées est celle où l’on n’a pas (Michael White), Friday, 19 December 2008 16:19 (fifteen years ago) link
I like to think of it this way:
If we imagine subprime mortgage-backed securities as foetid botulism-tainted cans of meat all marked Grade AAA by unscrupulous meat inspectors (ratings agencies), and imagine the banks, insurance companies, hedge funds, and pension funds are the hungry customers who stocked up on these products for their winter food supply, then proceeding from this simple premise it becomes easy to imagine that all these hungry customers are now, dead, dying, or deathly ill from eating the tainted meat, and many of their rotting, bloated corpses are lying at the bottom of the well from which the world's economy draws its drinking water.
See! Economics is easy when you apply a little creativity!
― Aimless, Friday, 19 December 2008 18:06 (fifteen years ago) link
This is why I drink gin.
― La plus perdue de toutes les journées est celle où l’on n’a pas (Michael White), Friday, 19 December 2008 18:14 (fifteen years ago) link
that's a fantastic article michael.
― Tracer Hand, Friday, 19 December 2008 18:31 (fifteen years ago) link
ahahaha, I'm glad Mort Zuckerman got screwed. He's probably in a bar with McLaughlin, Tony Blankly, and that black dude with the Spike Lee glasses bitching and moaning about how he has to shut down his stupid magazine.
― burt_stanton, Friday, 19 December 2008 18:56 (fifteen years ago) link
M. White, don't bogart that gin.
― Aimless, Friday, 19 December 2008 19:41 (fifteen years ago) link
http://www.huffingtonpost.com/dave-belden/mad-about-madoff-the-less_b_152153.html
― the sun just sent me a text (gbx), Friday, 19 December 2008 22:00 (fifteen years ago) link
yeah, it's not capitalism as per adam smith that's bad. it's the modern model of publicly traded corporations that seems to be utterly and completely fucked up.
― El Tomboto, Friday, 19 December 2008 22:08 (fifteen years ago) link
http://cache.boston.com/universal/site_graphics/blogs/bigpicture/2008_pt3/06_17210625.jpg
― caek, Friday, 19 December 2008 22:57 (fifteen years ago) link
Staff stand in a meeting room at the Lehman Brothers offices in the financial district of Canary Wharf in London September 11, 2008. Lehman Brothers eventually filed for bankruptcy - the largest bankruptcy in U.S. history - and was delisted from the NYSE, and later liquidated. #
i posted that article about 1873 in October! and Mackro Mackro, i think it was, told me that such comparisons are irrelevant. sorry this is a worthless post :)
― Vichitravirya_XI, Friday, 19 December 2008 23:42 (fifteen years ago) link
Hey I posted it in October! Joshea was unconvinced about the comparison.
― stet, Saturday, 20 December 2008 00:20 (fifteen years ago) link
http://www.ritholtz.com/blog/2008/12/chicago-repudiation/
this is the best news I've heard in years
― TOMBOT, Tuesday, 23 December 2008 16:27 (fifteen years ago) link
http://online.wsj.com/article/SB123025036865134309.html
retail is the new newspaper industry?
― delicate mouse tune, crash of cat chords (Lamp), Friday, 26 December 2008 16:21 (fifteen years ago) link
Of all the "Chicago Schools of" things, that one seems pretty thrown together.
― mose def (kenan), Friday, 26 December 2008 16:45 (fifteen years ago) link
this is from a british perspective but elliott's analysis doesn't seem wildly inappropriate for america, either:
http://www.guardian.co.uk/business/2008/dec/22/keynes-left-economics-economy
― Tracer Hand, Friday, 26 December 2008 17:18 (fifteen years ago) link
The bottom has been falling out of retail every holiday for years now. duh + shrug.
― El Tomboto, Friday, 26 December 2008 18:35 (fifteen years ago) link
tracer the problem with that analysis for the US is that we already had an election and the winner has been showcasing his keynes steez nearly every weekend since?
― El Tomboto, Friday, 26 December 2008 18:37 (fifteen years ago) link
Why are people surprised by ANY of this shit, by the way? The writing has been on the wall for brick & mortar shops for years. Of course all retail is going to slump when the entire country's economy faceplants. The writing's been on the wall for newsprint for even longer than retail, and by all accounts the management of most publications has never been what you might call adaptable or even competent. Businesses that we have known were on thin ice for almost a decade are in trouble for SURE!! Oh SNAP!!
― El Tomboto, Friday, 26 December 2008 18:42 (fifteen years ago) link
there's no concrete evidence i've seen that obama seez any keynez steez as necessary beyond a two-year recovery program, which krugman warns won't be enough. the other stuff elliott says about the total lack of a center-left apparatus that actually draws longterm lessons from this and then puts policy in place to capitalize on those lessons seems pretty on point; the feeling i get so far from democrats is "yall screwed up, now it's going to take democrats to return us to the status quo" when the status quo is what got us into trouble in the first place.
― Tracer Hand, Friday, 26 December 2008 19:02 (fifteen years ago) link
^
― mose def (kenan), Friday, 26 December 2008 20:58 (fifteen years ago) link
there are so many unfounded assumptions in that graph its hard to know where to start
― ice cr?m, Friday, 26 December 2008 21:01 (fifteen years ago) link
There's no upside for Obama to announce in advance that the gigantic stimulus package he wants Congress to pass asap will not revive the economy. He may or may not know it is true, but even if he knew it were true, he wouldn't want to say it.
― Aimless, Friday, 26 December 2008 21:03 (fifteen years ago) link
That's pretty optimistic.
― mose def (kenan), Friday, 26 December 2008 21:17 (fifteen years ago) link
wait why is retail a dying industry like newspapers? im not sure i get it
macys was paaacked today btw -- im assuming its cuz of the sale prices -- got a wool argyle sweater for $25
― choom gangsta (deej), Friday, 26 December 2008 23:57 (fifteen years ago) link
Tried to buy a suit at Brooklyn Macy's today but their selection kind of sucked imho. Fuck an Alfani.
― ichard Thompson (Hurting 2), Saturday, 27 December 2008 00:06 (fifteen years ago) link
i just got a CK suit there during the huge tgiving black friday sales -- good deal and they adjusted it for me pretty inexpensively
― choom gangsta (deej), Saturday, 27 December 2008 00:11 (fifteen years ago) link
retail's more just comically overbuilt in anticipation of a never-ending housing bubble
― circles, Saturday, 27 December 2008 00:36 (fifteen years ago) link
Optimism is my trademark move.
― Aimless, Saturday, 27 December 2008 00:52 (fifteen years ago) link
yah there was a piece in the times this week about a town in the bay area that had transformed most of their old industrial sites into retail space and how drastically they've overbuilt - now that ppl have no credit to spend the town seemed basically fucked. the most damning thing was that despite the writing being on the wall new developments and stores were opening right through the summer. also there was no real acknowledgment of how unsustainable that kind of development was most of the civic leaders and businessppl interviewed had the attitude of "oh the next year will be bad but things will bounce back"
the stuff in the WSJ article was interesting to me, at least a little, in that the degree of difference between on-line and b+m retail was so marked - i'm not trending this shit for a living but from what i recall the decline is much less severe on-line than expected that has to be worrying news for retail ppl. i'm curious about how that will play out too, what the means for communities like the one i mentioned above and for any recovery in unemployment #s.
― delicate mouse tune, crash of cat chords (Lamp), Saturday, 27 December 2008 03:04 (fifteen years ago) link
I think I read that Amazon's holiday sales were up considerably from last year. Which makes the comparison between brick and mortar retail and newspapers more apt -- both are being hit by a combination of recessionary pressures and increasing competition from online outlets.
― ichard Thompson (Hurting 2), Saturday, 27 December 2008 04:22 (fifteen years ago) link
u guys hav no faith in america imo
― ice cr?m, Saturday, 27 December 2008 06:49 (fifteen years ago) link
eAmerica >>> brick and mortar america
― choom gangsta (deej), Saturday, 27 December 2008 09:13 (fifteen years ago) link
ice cr?m, have you seen evidence that there's any sort of real movement from either obama or the congressional leadership that they're looking to radically realign how american finance works? for instance, nationalizing banks for the long term? we've heard talk about more regulation and surely we will get it, but the underlying goal seems to be as speedy a return to high-flying finance as is possible, houses used as ATMs, etc etc. the only real difference being capital requirements for ibanks. the government will spend massively over the next two years to bridge us there and then, uh, everything's supposed to be peachy. krugman says this is a pipe dream. elliott says that apart from krugman and stiglitz there is no policy establishment in the US doing the heavy lifting over the past 30 years to effectively seize this window of opportunity the way reagan and thatcher seized theirs in the late 1970s. this all seems accurate to me. if any of this seems unfounded please say what it is, i'd be interested to hear your point of view.
― Tracer Hand, Saturday, 27 December 2008 10:52 (fifteen years ago) link
the obama admin has shown me nothing thatd imply theyre looking to reinflate the housing bubble - and there are some really obv things they could do to make that happen - i dunno what yr talking abt as far a nationalizing the banks thats never ever gonna happen and isnt imo particularly germane to the conversation - restructuring new regulation and actual application of existing regulations is a completely reasonable and doable reaction to the current banking stupidity
also not really sure why u think the obama admin is planning on returning to bush admin policies after two years - just cause hes offing a two year plan right now doesnt mean theres nothing after that - maybe lay of the krugman a lil - hes obv a brilliant economic mind but his political analysis is so often just a bizarre overly general pessimistic extrapolation of current events
― ice cr?m, Saturday, 27 December 2008 14:39 (fifteen years ago) link
or for that matter past events - his current obsession is w/38 when fdr let his foot off the keynesian gas causing another recession - theres def a v good lesson there but every situation is unique and this is not 1933
― ice cr?m, Saturday, 27 December 2008 14:43 (fifteen years ago) link
restructuring new regulation and actual application of existing regulations is a completely reasonable and doable reaction to the current banking stupidity
absolutely, but it's not a political response remotely on par with what reagan and thatcher mounted around 1980, and this current debacle is almost certainly worse than what either country went through then. the fact that partial long-term nationalization of american banks would "never ever happen" is testament to the total lack of intellectual and ideological groundwork to this point, despite such a prospect being a pretty sound policy and comparable in scale to what reagan and thatcher pulled off.
― Tracer Hand, Saturday, 27 December 2008 15:18 (fifteen years ago) link
obama i think theres reason to believe does have ambitions on par w/reagan - they just likely dont have to do w/nationalizing the banks
― ice cr?m, Saturday, 27 December 2008 15:21 (fifteen years ago) link
thatd be imo sort of a left field thing to spend yr political capital on - in fact can u explain to me how thatd work and why its a good idea
― ice cr?m, Saturday, 27 December 2008 15:22 (fifteen years ago) link
http://letmegooglethatforyou.com/?q=state-owned+bank
― Tracer Hand, Saturday, 27 December 2008 15:41 (fifteen years ago) link
no u mad lazy homes
― ice cr?m, Saturday, 27 December 2008 15:42 (fifteen years ago) link
it's just one example of a far-reaching change that won't happen. that it is so "left-field", that obama would be a fool to risk his political capital on it, proves my/elliott's point rather nicely.
― Tracer Hand, Saturday, 27 December 2008 15:42 (fifteen years ago) link
dude u cant do everything just explain why u think this is at all important or even a good idea
― ice cr?m, Saturday, 27 December 2008 15:43 (fifteen years ago) link