The 50 Billion Dollar Man
Posted: Friday, December 12, 2008
by Joseph Jagde
A Wall street tycoon running an investment house for the super rich has said he lost approximately 50 billion dollars worth of assets. His steady good returns apparently were taking from one branch of the business to another and this helped presuppose the representations that he was an expert and astute investor upon whom many could rely on parking their millions.
Some of his story does seem emblematic to what is going on, the buildup of a name or firm with the big reputation, which attains huge status and this marque status becomes a way of exploiting the masses and indeed becomes the cover point for the operations which are done more of less cart blanch.
Examples of overarching status could include Alan Greenspan, who was supposed to be the financial guru of the financial gurus and this status conferred into his pronouncements that derivatives shouldn't be subject to any regulations despite the astronomical amounts of money being bandied about and the now to late apparent need to protect parties from being duped. Adam Smith's invisible hand didn't reach out to many if not most.
Apparently, Mr. Madoff started off as a lifeguard in the Rockaways, something he maybe should have stuck to before he lost that idea of service and protection and did not safeguard his customers money.
Madoff is alleged to have told employees he wanted to distribute the two or three hundred million he did have left to selected employees, relatives and friends before he turned himself in.
This is particularly interesting, as maybe these people could hold a stash for him, but more so it is so telling of an attitude that seems to permeate. The money flowing into these investments houses is other people money period. The big shot, even the one who lost just about all of it, thinks this money is his to distribute and there is no mention of the defrauded investor. There seems to be a lost sense that this was actually someone else's money and a huge sense of entitlement takes over.
The Titanic was a masterpiece of a ship at the time. But a sense of overconfidence did come about right away. The sea, especially where the Titanic was traveling was fraught with icebergs, and these icebergs were massive. You can't say you aren't going to hit an iceberg if indeed icebergs are actually there.
There are guesses to be made in making investment choices and while there are expert guesses, a guess isn't always the best way to navigate foreboding waters.
But the main thing here, is given Mr. Madoffs long history with Wall Street and how he is described as one of the pioneers of Wall Street, how does this sense that all the money flowing to and through his firms or companies, become his to grab at first and foremost.
Using the lifeguard analogy being that he was one, he might have been after a while only watching the girls on the beach, thinking every girl on the beach was his and then not looking to the water to see who might be at danger swimming, which is why he was there in the first place.
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