The Ultimate Ponzi Scheme

CNBC on Bernie Madoff

Thursday, December 18th, 2008 — 9:00 pm ET

About Chris F. Masse

Founder and President of Midas Oracle
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5 Responses to The Ultimate Ponzi Scheme

  1. Medemi says:

    Thomas Friedman said it best in the N.Y. Times: “I have no sympathy for Madoff. But the fact is, his alleged Ponzi scheme was only slightly more outrageous than the ‘legal’ scheme that Wall Street was running, fueled by cheap credit, low standards and high greed.

    What do you call giving a worker who makes only $14,000 a year a nothing-down and nothing-to-pay-for-two-years mortgage to buy a $750,000 home, and then bundling that mortgage with 100 others into bonds, which Moody’s or Standard & Poor’s rate AAA, and then selling them to banks and pension funds the world over? That is what our financial industry was doing. If that isn’t a pyramid scheme, what is?”

    http://www.marketwatch.com/news/story/youll-need-noahs-ark-survival/story.aspx?guid=%7B22EC3A22%2D34B4%2D4C62%2D9E76%2DBA51735A179E%7D&dist=TNMostRead

  2. Medemi says:

    I also like the new tax policy in the US. Taxing foreign (investors) only by letting the US dollar go.
    You can screw me. No problem. Happy Christmas.

  3. Thanks for the Friedman quote. I mildly agree/disagree with him. Mortgage derivatives are probably good. It’s their unregulated complexity that is bad. IMHO.

  4. Medemi says:

    “It’s their unregulated complexity that is bad.”

    That would be the understatement of 2008. It’s not about greed or low standards, in the sense that they won’t provide us with the answers we’re looking for. People are people, and we live in a competitive environment.

    Take a look at the main objectives of the FSA :
    http://www.fsa.gov.uk/Pages/About/Aims/index.shtml

    Now take a look at the Gambling Commission’s :
    http://www.gamblingcommission.gov.uk/Client/index.asp
    Noticed what’s missing ?

  5. Medemi says:

    What’s clearly missing from the Gambling Commission ‘s mission and objectives, is an attempt to ensure proper functioning of financial markets (betting exchanges), thereby preserving integrity in sports as well as betting integrity, thus protecting the industry in the long run. As it is, the GC poses a threat not only to the aforementioned, but to the future of prediction markets in general. My conclusion three years ago was that the lack of regulation we witness in the UK (today) poses a threat to society.
     
    It’s not a whole lot different from the financial crisis and the mess we’re in today. Most people have a tendency to look for ways to profit from a false sense of freedom and security that has been handed to them, and in a way feel blessed by the “free market” principle and all that. They are living a dream, brought about by this abundant drug called “greed”, causing them to be “tolerant”, complacent and ignorant.
     
    Until we wake up and are forced to face reality. It’s not a pretty sight when the taxpayer (most of whom have no involvement whatsoever) has to foot the bill. This time the bill will consist of chasing ghosts that can’t be captured, in an attempt to reinflate what can’t be reinflated, as we get only one shot at this. And one has to wonder whether we deserve it.

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