The investors suffer large losses from Madoff's fraud!

The investors suffer large losses from Madoff's fraud!
Dec 16, 2008 01:46
FRANKENSTEIN Points: Join Date: Nov 29, 2004 Status: offline	Bernard Madoff's fraud has caused great losses to the investors, especially those investment banks. HSBC has said that it could loss about 1 billion dollars. Royal Bank of Scotland, BNP Paribas and Santander are all the victims. The Royal Bank of Scotland says that it will lose £400 million. Japan's Nomura probably will lose Y27.5bn ($300m). After Madoff's fraud was exposed, many people start to question about the business model of funds of funds. Perhaps, there are more undiscovered frauds. After this scandal, will you invest your money in funds?

Dec 16, 2008 01:46

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Join Date: Nov 29, 2004
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Bernard Madoff's fraud has caused great losses to the investors, especially those investment banks. HSBC has said that it could loss about 1 billion dollars. Royal Bank of Scotland, BNP Paribas and Santander are all the victims. The Royal Bank of Scotland says that it will lose £400 million. Japan's Nomura probably will lose Y27.5bn ($300m).

After Madoff's fraud was exposed, many people start to question about the business model of funds of funds. Perhaps, there are more undiscovered frauds.

After this scandal, will you invest your money in funds?

Dec 17, 2008 21:36

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Join Date: Jul 22, 2008
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2 years ago, a colleague sent us an electronic x’mas ecard with a Christmas trees that is like a pyramid. The top of the pyramid (Christmas tree) is a crow which is supported by 2 ducks down through to the lowest level of swans. The same game is on and on everywhere…

Bernard Madoff just played the game like everybody else did
December 16, 2008 · By Charles Anthony

When things started to crumble, Bernard Madoff revealed that his whole business was a nothing more than a ponzi scheme. He promised returns to customers that were paid from the money given to him by new customers. Like all ponzi schemes, new customers kept the ball rolling and as long as new customers kept joining, nobody would know the difference. The scheme fails when the flow of new customers slows down.

I have a hard time sympathizing with his customers. They have thousands (sometimes millions) of dollars and they want to make more — nothing wrong with that. However, instead of working to earn more money, they handed it over to somebody without knowing his methods and they trusted his promises. They took a stupid risk. I think such greedy and blind trust fuels most of the evil commercial practices in this world. If people were more informed about the production processes, they would think twice before buying most of the junk they buy.

Dec 17, 2008 21:37

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Bernard Madoff just played the same game that most other financial institutions play. His ponzi scheme is not the only sham currently in operation. There are others that are accepted practice. The main thing about his ponzi scheme is that it has few branches in the pyramid. Thus, it is easy to point out the sham. However, old age security, Canada Pension Plan and employment/unemployment insurance are ponzi schemes too. We simply accept those as normal practice.

The entire “credit crunch” is the failing of a massive ponzi scheme: fractional reserve banking backed by central banking of fiat money. Everything rolls along under the radar — we are cultured to think that low levels of inflation are normal and healthy — as long as the banks are able to continue making loans. The whole thing comes crashing down when the bank runs out of credit-worthy customers. Nobody ever looks at our centralized banking system as a ponzi scheme because when all else fails, the central bank can print more money! If Bernard Madoff had the backing of a central bank — the way the commercial banks do, his business plan would succeed.

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