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Madoff Losses Will Change Hedge Funds
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page 8 of 10
FBEye
Dec 17, 2008 1:55 PM GMT
It will be interesting to see how many investors go to cash-in their investments in January. Many will wait until January 1st so they can avoid paying taxes for 15 1/2 months on any gains. If there are more Ponzi schemes out there we'll probably find out by mid January. It's too bad that the USA has become a place where people, & the world, have to hire Accountants, Lawyers, Private Investigators, and place wire-taps & hidden cameras inside the places where they invest their money, huh?
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james M. Anderson
Dec 17, 2008 1:35 PM GMT
For those of us not allowed into the rarified air of these "insider" funds and country club deals, this is sweet confirmation of the line from Groucho: "I wouldn't want to be a member of a club that would have me as a member." All of this is really too sweet.
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ol' army
Dec 17, 2008 1:28 PM GMT
YeeHa,
Get over the Bush thing. This financial meltdown started with the Carter administration's Community Reinvestment Act and culminated with Barney Frank and Chris Dodd protecting it and defeating any reforms for Fannie Mae and Freddie Mac as proposed by the evil Bush Administration in its first term.
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PB
Dec 17, 2008 1:24 PM GMT
It looks like Warren Buffet will win his bet.
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Tom Brosnahan
Dec 17, 2008 1:12 PM GMT
"Without the huge source of ready money..."â??but that's exactly the point: there NEVER WAS such a source. There NEVER WAS such money. It was a leveraged fantasy.
"...hedge fund returns will suffer..." Recent returns were never legitimate in the first place, so it is absurd to look upon the height of the bubble as a valid reference point.
Leveraging is an acrobatic stunt: done successfully, it wows the crowd. But if the acrobat reaches too far and misses the bar, he dies.
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YeeHa
Dec 17, 2008 12:46 PM GMT
Just another example of the Bush Administration's lack of oversight into critical parts of our financial system and economy. And hedge funds are really just a turbo version of the millions of regular folks that got caught up in the real estate financing fiasco that is taking down the economy. How many interviews have you seen where the "victim" admitted they did not understand the loans they signed up for? The "prosperity" of the past ten years was funded solely by fictional profits generated by phantom rises in home prices and the stock market, all made possible because people felt falsely rich. Whether it was mortgage brokers writing bogus loans or Madoff forging stock trades, people bought into it. For that matter, Detroit has not made a successful sedan for a decade, but chose to fake success by selling over-sized gas-hog SUVs, which Americans bought in droves. It takes two parties to make these things happen. We've become a nation of lazy people that actually expect something for nothing and for all "get rich quick" schemes to pay off.
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Viv Chandra
Dec 17, 2008 12:42 PM GMT
Sally - It seems Madoff refused to provide online access to his clients
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Rick in Helsinki
Dec 17, 2008 12:08 PM GMT
This not only threatens hedge funds, it threatens the entire financial industry in the United States. I already have brokers calling me from London saying that I am better off investing in European shares because the U.S. markets, market regulation and market supervision can no longer be trusted. Until the penalties for engaging in white collar crime are dramatically increased, there is every reason to believe that this kind of illegal activity will continue. This is especially true given the lax supervision of financial regulation which means that individuals must self-regulate.
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Sally in Chicago
Dec 17, 2008 11:13 AM GMT
This is what I don't understand? Didn't his fund have an online presence whereby the investors could check their account? Or did they rely on monthly statements? If you could check your account online daily you could see the activity.
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Viv Chandra
Dec 17, 2008 10:14 AM GMT
I fail to understand how can someone run a Ponzi show for decades and not come under the scrutiny of the regulators. Hedge funds, I agree are loosely regulated but investors throwing 50 BILLION $$$ into God knows what ..Hmm hard to comprehend. Aren't we the ones that have the best and the brightest running the country ?
Link to this comment
return to story
Madoff Losses Will Change Hedge Funds
All Reader Comments
page 8 of 10
FBEye Dec 17, 2008 1:55 PM GMT It will be interesting to see how many investors go to cash-in their investments in January. Many will wait until January 1st so they can avoid paying taxes for 15 1/2 months on any gains. If there are more Ponzi schemes out there we'll probably find out by mid January. It's too bad that the USA has become a place where people, & the world, have to hire Accountants, Lawyers, Private Investigators, and place wire-taps & hidden cameras inside the places where they invest their money, huh?
Link to this comment
james M. Anderson Dec 17, 2008 1:35 PM GMT For those of us not allowed into the rarified air of these "insider" funds and country club deals, this is sweet confirmation of the line from Groucho: "I wouldn't want to be a member of a club that would have me as a member." All of this is really too sweet.
Link to this comment
ol' army Dec 17, 2008 1:28 PM GMT YeeHa, Get over the Bush thing. This financial meltdown started with the Carter administration's Community Reinvestment Act and culminated with Barney Frank and Chris Dodd protecting it and defeating any reforms for Fannie Mae and Freddie Mac as proposed by the evil Bush Administration in its first term.
Link to this comment
PB Dec 17, 2008 1:24 PM GMT It looks like Warren Buffet will win his bet.
Link to this comment
Tom Brosnahan Dec 17, 2008 1:12 PM GMT "Without the huge source of ready money..."â??but that's exactly the point: there NEVER WAS such a source. There NEVER WAS such money. It was a leveraged fantasy. "...hedge fund returns will suffer..." Recent returns were never legitimate in the first place, so it is absurd to look upon the height of the bubble as a valid reference point. Leveraging is an acrobatic stunt: done successfully, it wows the crowd. But if the acrobat reaches too far and misses the bar, he dies.
Link to this comment
YeeHa Dec 17, 2008 12:46 PM GMT Just another example of the Bush Administration's lack of oversight into critical parts of our financial system and economy. And hedge funds are really just a turbo version of the millions of regular folks that got caught up in the real estate financing fiasco that is taking down the economy. How many interviews have you seen where the "victim" admitted they did not understand the loans they signed up for? The "prosperity" of the past ten years was funded solely by fictional profits generated by phantom rises in home prices and the stock market, all made possible because people felt falsely rich. Whether it was mortgage brokers writing bogus loans or Madoff forging stock trades, people bought into it. For that matter, Detroit has not made a successful sedan for a decade, but chose to fake success by selling over-sized gas-hog SUVs, which Americans bought in droves. It takes two parties to make these things happen. We've become a nation of lazy people that actually expect something for nothing and for all "get rich quick" schemes to pay off.
Link to this comment
Viv Chandra Dec 17, 2008 12:42 PM GMT Sally - It seems Madoff refused to provide online access to his clients
Link to this comment
Rick in Helsinki Dec 17, 2008 12:08 PM GMT This not only threatens hedge funds, it threatens the entire financial industry in the United States. I already have brokers calling me from London saying that I am better off investing in European shares because the U.S. markets, market regulation and market supervision can no longer be trusted. Until the penalties for engaging in white collar crime are dramatically increased, there is every reason to believe that this kind of illegal activity will continue. This is especially true given the lax supervision of financial regulation which means that individuals must self-regulate.
Link to this comment
Sally in Chicago Dec 17, 2008 11:13 AM GMT This is what I don't understand? Didn't his fund have an online presence whereby the investors could check their account? Or did they rely on monthly statements? If you could check your account online daily you could see the activity.
Link to this comment
Viv Chandra Dec 17, 2008 10:14 AM GMT I fail to understand how can someone run a Ponzi show for decades and not come under the scrutiny of the regulators. Hedge funds, I agree are loosely regulated but investors throwing 50 BILLION $$$ into God knows what ..Hmm hard to comprehend. Aren't we the ones that have the best and the brightest running the country ?
Link to this comment
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