Massive Ponzi, $50 Bil

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Massive Ponzi, $50 Bil

Post  ExoticWhiteMan on Tue Dec 16, 2008 12:40 pm

http://www.marketwatch.com/news/story/How-Madoff-cost-my-family/story.aspx?guid={8B073FA4-2052-485A-86FF-D4905E250DB9}&dist=SecMostRead

http://money.cnn.com/2008/12/15/magazines/fortune/madoff.fortune/

The first article, from Market Watch, gives details of how a woman lost her job and life savings since the charity she worked at invested with Madoff. The second article is a lot more about Madoff and his company, and gives details about his scheme. Elsewhere, I've read that his maximum penalty is 20 years + a fine (negligible compared to his wealth). I think he's broke now, and he's likely passed on the many billions to people to hold it for him so that it probably won't be seized. This is a massive development. Lots of rich people got screwed in this and are broke for blindly investing all of their net wealth with him.

This turn of events brings up a lot of issues that have to be solved. Wall Street is largely unregulated, unregulated enough such that a few banks can screw over the entire country for their own benefit. People like Madoff already have more than they need, and see no problem in using any ruthless, illegal strategy to increase their wealth further at others expense. I also think it's highly likely that agencies like the SEC are at least partly corrupt, since the rich could easily use their money to bribe regulators into ignoring violations. Events like these, along with the fact that taxpayers' money is being used to bail out banks and the results of saving money are way crappier than they should be (1% interest? wtf?!) are convincing me that this country is being run for the rich, by the rich, and paid for by everyone but the rich. With easy credit and low interest, everyone is encouraged to put themselves in debt and overextend their money. The massive loss of wealth on Wall Street (complete with golden parachutes for execs), the severe corruption in Illinois (two governors in a row, five in all), and the pervasive effect on money on government (campaign contributions = lobbyists dictating policy) are all examples of our country's financial self destruction. The rich sure as hell aren't going to want to stop ripping people off out of good will. Only a severe change in policy started by clean politicians can start to correct the imbalance of power and wealth in our country. A change severe enough to mean anything will definitely face vehement opposition from lobbyists, but hopefully, Obama and others in Congress can somehow govern without bending over for campaign money. We can only hope =|.
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