Thursday, February 17, 2011

Bernard L. Madoff - 2 years later

Bernie Madoff has given a full-scale interview, his first since his arrest in December 2008. A lot has happened since Madoff's Ponzi scheme came crashing down around him, (and all of us) including the suicide of his son. In an about face from earlier assertions that he was the only person involved in the fraud, Madoff is now intimating that unidentified banks and hedge funds were somehow “complicit” in his scam.

I have always suspected this to be the case. To my mind, it is impossible to run a scam of that magnitude for 16 years without having some "knowledge" leak to the institutions that comprise the financial infrastructure necessary for a fraud of that size to be perpetrated. It is somewhat similar to the Enron case in my view.

So, you can look at it in one of two ways. Either there were certain people in certain financial institutions that deep down knew or suspected this was happening, OR, the bankers, investment gurus, analysts and other drones at the regulatory agencies were incompetent and uninformed. Either way, it doesn't fill one with confidence about our financial system. It's a small wonder mattress futures have been up for so long.


cube said...

We little people are sooooo out of the loop in which the elites travel. I know it sounds cynical, but I don't think we can get complete information on anything.

T. T. Douglas said...

Well, I actually worked at one of the large money center banks during most of that time and let's just say that we little people might not have known, but there had to be some risk and investment people that smelled a rat, or at least something rotten in the state of Denmark.