just off the back of that lorry, guv!
Sunday, December 14, 2008 at 09:46AM I see that Nicola Horlick, the so-called ‘City Superwoman’ who apparently juggled a city financiers job with raising four kids, has fallen foul of just about the oldest trick in the financial book; which of course is the old ‘Ponzi’ stunt. Nicola had apparently invested some twenty percent of her managed-money portfolio, some £21 million, in an American hedge fund investment vehicle run by one Bernard Madoff. His declaration that he didn’t have any of the huge amounts of cash left, was made to his sons after he had told them that he was planning to pay some small bonuses to his New York staff before closing shop. This statement sent the two boys racing to the Securities & Exchange Commission (SEC) to blow the whistle on dear old dad.
Madoff’s fund had sucked in huge investments from all over the financial world, including the fragrant Nicola’s, based on his track record which apparently in the early years was truly remarkable, as well as being completely genuine. But somewhere along the line, things started to go haywire with Bernards golden touch, and instead of being honest with his investors and stating his losses, he started paying his old investors with dividends based on new money which was still flowing in to his bank accounts. This practice, which was first invented, (and how it was named) by one Charles Ponzi, who promised to double his folllowers’ finds in ninety days. Unfortunately, Ponzi indeed did pay his original investors large returns, but the dividend cash came from new investors who, like the suckers they were, all knew a ‘real good deal’ when they saw one.
The true extent of Madoff’s financial skullduggery has fallen quite heavily on the affluent Jewish community of New York, who believed in Madoff to the extent of investing literally billions in his funds, and now it seems that most of the cash is gone. Nicola Horlick's involvement is again substantial, as quite a few wealthy British and European individuals and institutions lodged their cash with her fund, and that cash appears to have gone down the old Madoff sewer along with some forty-odd billion dollars from American investors.
My own Grandma, who was quite a lady in her day, was staying with us when I was a boy. We lived above my Dad’s pub, and of course came to know lots of things which went on in the life of a British pub. In 1961, the Grand National was being run at Aintree, and all the customers as well as my Dad and Mother, were talking about which horse would win, and whether to bet etc. In fact my Mom bet on Nicolaus Silver and won, but she placed her cash on that horse because, ‘He looked really nice’. I had a ten-shilling note, which was in truth quite a sum for an eleven-year-old boy, and I was going to bet on another horse, but my Grandma said, “Michael. the only proven way to double your money is to fold it up and put it back in your pocket!”
The get-rich-quick routines of the shady side of the financial world have been with us for a very long time, but shouldn’t someone have looked at this one financial vehicle which was apparently surpassing all problems and generating huge profits for all, and casually wondered,
“If it looks too good to be true, it probably is!”
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Reader Comments (5)
Just a few comments from the Lew Rockwell blog:
I know it's cheating, but why reinvent the wheel, when these folk have already said anything worthwhile saying about such 'people', and hedge funds in general..- and don't forget the government!
"These people willingly and voluntarily handed over their money to this guy. The government does this every day, stealing your money and using it for a big ponzi scheme known as Social Security. But you are forced to hand it over, if you don't you go to jail. So why is Bernie Madoff arrested and the politicians are not? Why are so many people so willing to be slaves to the government? Where is the accountability, huh??"
"What this Bernie Madoff did privately is no worse than what Hank Paulson and Ben Bernanke are doing publicly to the U.S. taxpayers. In a sad way, Madoff should be admired for having been able to accomplish such a swindle without the help of the U.S. Congress."
Not sure this one really conveys what the writer meant, but I get the gist!...
"this proves flipping paper is an Asshole's Business"
I'm sure a big time recession does count as 'the tide going out!'
"When the tide goes out you get to see who's peeing in the ocean."
and 'the Link'
Again highlighting the need for REAL REGULATION of the markets.
Madoff is but the tip of the ice-berg, especially in New York
'These people willingly and voluntarily handed over their money to this guy. The government does this every day, stealing your money and using it for a big ponzi scheme known as Social Security'
I read a story on Yahoo Finance (US) yesterday where some of his investors stated they knew something had to be seriously wrong with Madoff's fund for YEARS, based on their large investment returns. There was never a valid explanation for the growth or returns. But they kept collecting!
Feel sorry for them? No!
Nope, cant say I feel much sympathy either. Many of those involved knew his deals were dodgy, but they assumed it was insider trading.
I dont even feel too sorry for these chumps either, whose greed also got the better of them and decided to put almost all of their nest egg into the one basket.
jones day law firm and sec are corrupt check www.webetrayamerica.com