The Annotated Madoff

I have a few footnotes to add to my musings on Bernard Madoff —- then I promise I will try to stop.  This post is mainly in response to the comments,  insightful and thought-provoking, that I have received on my Yo Mama For Obama diary on the Daily KOS website, particularly regarding my posts “Buzzwords” and “Madoff Made Me Do It”.

First of all, the government should in NO way, shape or form bail out the Madoff investors.  Period.  It is a basic reflex of human nature to scam other people for personal gains.  Call it original sin, call it anything you choose; it is as old as the hills and will continue.  This has been going on since the advent of time.  Shoot:  even the little third grader I cited in my last post was defrauding his classmates in order to satisfy his need for sugar- laden, forbidden junk food.  He promised to pay them back by creating “futures” on the most indescribable cake that supposedly would appear at sometime hence in their lives.  Hah!

Furthermore, the Madoff investors should be able to recoup the SIPC maximum insurance of $500,000 if AND ONLY IF Madoff, as a financial adviser, paid the required insurance to the SIPC.  If he never provided his investors with that insurance, payment at this time is a moot point.  The unfortunate investors should have inquired about this protection BEFORE they handed over their life savings to Madoff.

Please know that many of the Madoff investors were taken in by a scheme that was mulit-tiered.  Even if they had done their their proper and complete due diligence, it was a scam that was difficult to break through.  Here is an example of the many layers that served to protect Madoff’s diabolical scheme.  My friends had placed some funds into their Wachovia Securities account. This was the first layer.  Then they designated a part of those funds to be “put under management” with Wachovia.  This was the secondary layer.  Then, a part of that managed portfolio was turned over to Madoff’s organization.  This was the tertiary layer.  My friends, once they “hired” Wachovia’s management team, had no clue as to where or how those funds were invested.  This was a common occurrence with Madoff’s investors: he marketed himself and his offerings to many different business management firms, other money managers and too many over-eager philanthropic organizations.  When so many tiers of investment strategy are involved, when literally “passing the buck” on down through the financial pipeline is so widespread, the recipe and opportunity for fraud is perfect.

In the following article, Gail Collins of the New York Times had described the bastardization of another buzzword, “the best and the brightest”:

Collins got it right:  the “best and the brightest” has now come to represent, when applied to Wall Street, the richest and most asset-laden people.  Surely this was not the original intention of the definition of this buzzword.  This new take on “the best and the brightest” also serves to obviate the basic premises of significant education, hard work, viable ethics, and altruistic aims that accompanied the original meaning of the phrase.  Once again, the quest for the superlative has taken precedence over any semblance of reason, reality and right from wrong.

My take on this twisted verbiage is that we are all the victims of deceit.  Whether it is Ponzi schemes, political promises, or descriptions used to falsify actual practices and events, the intent is clear, and that intent is laden with despicable lies and flat-out cheating.

Once the deed is done, there is no restitution.  We must ask all the questions before we jump on any bandwagon, lest our lives become just an annotation.  I for one, have higher aspirations than just being a footnote.

Special Thanks

Thank you for your comments, on this website as well as the Daily KOS.  I read them carefully and they enlighten me.  I need your input not only to spur a deeper understanding of the issues  but also to create new topics for discussion.  Keep up the good work!  I rely on you.

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