The Securities and Exchange Commission, in a civil complaint, has accused Bernard L. Madoff, a former chairman of the NASDAQ and a well known figure on Wall Street, of running an “ongoing $50 billion Ponzi scheme” according to the Wall Street Journal.
In a separate criminal complaint, Federal Bureau of Investigations agent Theodore Cacioppi said Mr. Madoff’s investment advisory business had “deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars.”
Dan Horwitz, a lawyer for Mr. Madoff, declined to elaborate on the allegations. “Bernard Madoff is a longstanding leader in the financial services industry with an unblemished record,” Mr. Horwitz said in an interview. “He is a person of integrity. He intends to fight to get through this unfortunate event.”
Madoff was released on bail. Reports said that Madoff had told a group of employees he called to his apartment that “he was ‘finished’, and that he had ‘absolutely nothing’ and ‘it’s all just one big lie’. He told the senior employees that he planned to surrender to authorities in about one week, but wanted to use the $US200-300 million he had left in his possession to make payments to certain selected employees, family and friends, according to court documents.” The Australian share market fell 2% on the news of Madoff’s arrest.
The historical Ponzi — Charles Ponzi — “was an Italian immigrant to the United States who became one of the greatest swindlers in American history.” By all accounts, Ponzi was a charismatic and charming man with a vague background — parts of his biography remain sketchy to this day — who hit upon a get-rich-scheme which still bears his name.
he worked at a number of businesses, before hitting upon an idea to sell advertising in a large business listing to be sent to various businesses, an idea which others would later, independently, invent as the Yellow Pages. Ponzi, unfortunately, was unable to sell this idea to businesses, and his company failed soon after.
A few weeks later Ponzi received a letter in the mail from a company in Spain asking about the catalog. Inside the envelope was an international postal reply coupon (IRC), something which he had never seen before. He asked about it and found a weakness in the system which would in principle allow him to make money.
The purpose of the postal reply coupon was to allow someone in one country to send it to a correspondent in another country, who could use it to pay the postage of a reply. For use within the same country, postage stamps would be sent; but stamps issued by one country cannot be used in another. IRCs were priced at the cost of postage in the country of purchase, but could be exchanged for stamps to cover the cost of postage in the country where redeemed; if these values were different, there was a potential profit. Inflation after the First World War had much decreased the cost of postage in Italy expressed in U.S. dollars, so that an IRC could be bought cheaply in Italy and exchanged for U.S. stamps to a higher value. The process was: send money abroad; have IRCs purchased by agents; send the IRCs to the U.S.A.; redeem the IRCs for stamps to a higher value; sell the stamps. Ponzi claimed that the net profit on these transactions, after expenses and exchange rates, was in excess of 400%. This was a form of arbitrage, or buying low and selling high, which is not illegal.
Ponzi canvassed friends and associates to back his scheme, offering a 50% return on investment in 45 days. The great returns available from postal reply coupons, he explained to them, made such incredible profits easy. He started his own company, the Securities Exchange Company, to promote the scheme. …
By July 1920 he had made millions. People were mortgaging their homes and investing their life savings. Most did not take their profits, but reinvested.
Ponzi was bringing in cash at a fantastic rate, but the simplest financial analysis would have shown that the operation was running at a large loss. As long as money kept flowing in, existing investors could be paid with the new money, but colossal liabilities were accumulating.
Ponzi lived luxuriously: he bought a mansion with air conditioning and a heated swimming pool, and brought his mother from Italy in a first-class stateroom on an ocean liner. He was a hero among the Italian community, and was cheered wherever he went.
And then the bottom fell out and Ponzi went from being hero to zero in an instant. But to the end Ponzi saw himself as God’s gift to mankind.
Ponzi granted one last interview to an American reporter, and commented about the wild ride he had given Bostonians: “Even if they never got anything for it, it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over.”
The website Changing Minds argues that the “two main levers of confidence tricksters are gullibility and greed. They will exploit the incautious and naive and offer something for nothing as an appeal to our natural desires.” One would have thought that the professionals in the financial industry would have learned to spot every sort of con. The recent financial collapse and Mr. Madoff’s troubles suggest that maybe we are not as smart as we think. Former SEC Chairman Harvey Pitt said, “it’s unfathomable how this could have gone on for so long without anyone having any clue about it”. He expects “the likelihood anyone will get any of their money back is slim to none.”
Doug Kass at the Trading Diary says this is a major story:
The story of Bernard Madoff, if the charges of fraud are true, is the single biggest financial story of the year. It is bigger than WorldCom, bigger than Boesky and bigger than Tyco. It attacks at the core of investor confidence — because, if true, and this could happen … Investors might think that almost anything imaginable could happen to the money they have entrusted to their fiduciaries.
I’m not sure about the “single biggest financial story of the year”. That belongs to the financial meltdown. But then 2008 isn’t over yet. And just because someone will ask for it, here’s Bernard L. Madoff’s political contribution file and his Muckety connections profile, but I don’t think it’s relevant.
In a criminology class I took many, many years ago I learned that you cannot con an honest man. If a “mark” does not have larceny in his soul, we learned, he won’t fall for a confidence game. Ponzi illustrates the principle perfectly: people who invested with him knew they were taking advantage of a discontinuity in the international postal system. Apparently Bernard Madoff does too. The more important question might be, what does this say about elected officials like Barney Frank, Chris Dodd and Rod Blagojevich? Are they the confidence men or the marks? F
He intends to fight to get through this unfortunate event.
So it’s an “unfortunate event” now, is it? My my. I suppose Madoff is a mere victim of forces beyond his control. We ought to feel sorry for the schmuck.
I won’t be really happy until some of these Wall Street guys are set up against a wall, given a last cigarette (oh wait, nevermind), and blasted into the next world, tax free.
Like that’ll ever happen.
And the biggest Ponzi scheme of all, Social Security, continues unmolested.
If you’ll pardon me saying so I think the only persons who’ll wind up holding the bag will be the average working stiffs. For reasons I have yet to fully understand, confidence men never completely go down for the count. They may get slowed down some, but rarely if ever KO’d. They’re survivors in a way that ordinary people can never be. Put them on the Titanic and they’ll wind up in the lifeboat. Put them on the stand and they’ll cut a deal. Catch them stealing classified docs and they’ll negotiate a suspended sentence and a book advance for five million dollars. Somehow they are never, ever, completely out of moves until the Grim Reaper removes them naturally from this world.
In my more cynical moments I think that politics is a derby in which fastest talkers gather each year to compete to see who can make a bigger fool of the voters; that neither intelligence nor hard work, contrary to rumor, are the real ingredients to success in this world. That factor, in my more despairing moments, I attribute to an unlimited capacity to lie, total ruthlessness and an unswerving desire to put one’s self above all else. That’s called ambition and the reason people get caught holding the bag is they don’t have enough of it. It’s loser talk, I know. But there you go.
Merry Christmas from Wall Street. Madoff will never be able to repay society for the staggering amount he stole
Madoff hasn’t been convicted yet. But what bothers me isn’t what we are learning about Madoff and all the other failed financial houses on Wall Street. It’s what we still don’t know. What makes us think that all the secrets have come to light? That this is is the last ongoing FBI investigation?
I heard an interview with David Faber on CNBC this evening. He said that there were numerous prominent families and charities in NYC that had entrusted their wealth to Madoff. Later in the program someone else said that Madoff supposedly had some $17 billion in assets on the books, but perhaps only as much as $100 million in reality. There will be dark days ahead for those who trusted this man. Their quality of life will change drastically. They may be poorer, but will they necessarily be worse off?
Wretchard:
I loved your comments in #4. Cynical? Not at all: right on! I loved your characterization of politics as a talk derby designed to make fools of voters. Well, I loved and hated it — it cut too close to the bone to just be laughed off.
I will repeat something I have said elsewhere and perhaps even on Belmont Club: I postulate that part of the reason for the fall of the Soviet Union was public cynicism. The old Soviet joke “we pretend to work and the state pretends to pay us” was not a joke, it was true and it extended across everyday life all over the USSR.
In a similar vein I see America tip-toeing in the same direction: Barney Frank lectures the nation on deregulation having caused the mortgage meltdown, when in fact it was just the opposite and Frank was very much involved. Obama distances himself from Blagojevich when in fact he’d be doing just the opposite if Fitzgerald had waited another week before arresting the Illinois Governor. And the voters nod seriously as if Frank and Obama (and all the others) really are telling the truth.
We would all be laughing if it weren’t so sad. Cynical? Us? Can you blame us?
Good post, R. F
Yeah and some crackhead steals $60 from a Circle K and gets 10 years in the Big Yard and these guys steal the equivalent of the GNP of all of Africa added up and skate. And you wonder why people are pissed off on Main Street. If the GOP doesn’t shake the label of being in the tank for Wall Street they’ll never win an election in this century.
I don’t know recessions from depressions from next Thursday ,but this sure seems like the 1920′s all over again.
“The Law in its infinite majesty forbids the rich man as well as the poor …”
Why does the GOP get blamed for this? All the evidence is that the Democrats are the party of the very rich and of people who derive incomes from services and rentiers, as well as the clueless rented. The Republicans are the party of small business and skilled labor.
I don’t see this as a confidence scheme given Madoff’s resume and reputation. More than likely, Madoff met his ego at some point and lost. Rather than admitting losses and loss of reputation, Madoff did the easy thing but took huge risks by covering his losses with new investor capital. The losses eventually became catastrophic as Madoff continued to refuse to admit defeat. It’s more like compulsive gambling. That’s my theory, anyway.
And the damage here is psychological. $50 billion shifted from one set of pockets to another set of pockets doesn’t hurt the economy, it’s the further erosion of confidence in traditional capitalist institutions.
“But what bothers me isn’t what we are learning about Madoff and all the other failed financial houses on Wall Street. It’s what we still don’t know.”
This is why this is the biggest financial story of the year. Confidence in those who safeguard wealth is extremely important to the functioning of our financial system. Stories like this just mean more credit contraction as the wealthy get stung by the bubbles aftermath.
It angers me that Madoff looted his investors only to give stolen money to the democrats. It goes without saying this seems to be a trend with Obama’s friends including Antoin “Tony” Rezko and Blagojevich & Co.
I think we are just uncovering the tip of the Obama/DNC financial Iceberg (Note how the market tanked as Obama went up in polls with his “We will spread the wealth around” platform). I suspect that Obama’s main financial man Soros is up to his neck in financial shenanigans.
I grandmother once said, “The democrats have looted this nation.” I am beginning to think she is correct.
[Not everyone was a sucker]
“Not every potential Madoff investor was fooled. Jim Vos, who runs due diligence firm Aksia LLC, said he spent several months probing Madoff’s firm on behalf of clients, only to recommend against investing in it. Vos said eight “feeder funds” invested about $15 billion with Madoff. Vos declined to name the clients. Among the red flags, Vos said: Madoff’s auditor, Friehling & Horowitz, operated from a 13-by-18-foot office in Rockland County, New York. Vos had an investigator stake out the office. A call to the New City, New York, office of Friehling & Horowitz after business hours wasn’t returned. “I’m shocked by how investors turned a blind eye to returns that were too good to be true, constant steady small positive monthly returns,” Vos said. “When something is too good to be true, it probably is.” Individual investors are also worried. A 68-year-old New York woman, who declined to be identified, said she and her 73- year-old husband invested about $12 million with Madoff. Her husband’s former law partner had met him at a country club on Long Island, she said.”
“Frequent Trader”
“Madoff bought and sold stocks frequently, she said, as reflected in trading-account statements running over six pages. Although she said she has four residences, including one on Manhattan’s Upper East Side, she fears the couple’s entire savings are gone except for $60,000 in a bank account. Since 2000, Madoff has donated at least $100,000 to the Democratic Senatorial Campaign Committee and more than $23,000 to the party’s candidates, including New York Senator Charles Schumer and New Jersey Senator Frank Lautenberg, according to the Center for Responsive Politics.”
See: Bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=aq7Isk2jU.HQ&refer=home
This story is really about maintaining one’s independence. Everyman is too lazy to do the work that allows success in the financial markets, so he is potential prey for the Ponzis of the world. In the mid-80′s I tried following the advice of Barron’s guru of the week and quickly found they were full of it. I decided I had to puzzle out my own system. I began to treat the market as I would an organism under scientific study to learn its behavioral regularities. That took many years, but eventually resulted in a very effective trading system. Everyman won’t do that long term work.
As to Wretchard’s comment @4, Everyman has acquiesced in letting the state deal with criminals. Lex talionis of the Scottish Border, the Appalachian Ulstermen, and many “back countries” doesn’t appeal to the cultured folks of the left or the right, but it at least insures some justice and some deterrence. (See Fraser’s “The Candlemas Road” for a look into that forgotten approach to the redress of grievances.) Until the defrauders and many lesser miscreants are more afraid of at least one of their victims than they are of the law, the sheeple will continue to get shorn.
A little establishment that I frequented in back country Brasil had a bar with, at one particular spot, a perpendicular groove where a bullet had exited the belly of a seducer of young women as he was drinking. I pondered that groove many evenings and concluded that it was an exemplar of why the little town was so peaceful. Civilization is a balancing act and currently the balance is too far toward passivity.
Ridgerunner is dead on target. We’re going to need to see some of these bastards shot down in cold blood before we start seeing even the slightest compunction from them about their criminal dealings.
Same thing on the other end of the spectrum, with violent black criminals. So many blacks have spent so much time in “the system” that there is no longer any shame attached to going to jail. For lots of young blacks it’s expected, just as going to college is for whites and Asians. If anybody remembers the “street kid” problems in Brazil, where upstanding citizens were saying things like, “Improve your neighborhood: kill a street kid today,” take note. It’s coming to a U.S. neighborhood near you soon. Obama’s not going to inspire many to work harder, but he’s already inspired many to think there will be fewer strictures on their criminal behavior.
Buy guns and ammo while you still can.
Ken says: “50 Bln shifted from one set of pockets to another does not hurt the economy”. This is a rather severe misstatement of what happened. It is more like 50 Bln. that was thought to be on deposit or in investment funds disappearing overnight. So . . . less taxes will be paid given that the returns in 08 were a fiction, less money will be spent, etc.
I know because this was my kids college fund and my nest egg. The fact that it is gone means that there is less to give to charity this year, less to put into my and my wife’s small businesses, we need to cut back all over. This represents more than 25% of our income and all of our non-retirement savings. It was a family fund, run by people who we thought were trusted and watched. And, at some level, our system has to be based in trust that the whole thing is not rigged or it will fall apart.
@16: Not too surprising that you go by mac. A British officer in revolutionary America commented that the new system being established was not “democracy” but was “mac-ocracy.” He was referring to the fact, well understood then but lost in current politically-correct histories, that the Ulstermen (Scots-Irish) were the backbone of the Revolution, serving under arms far out of proportion to their representation in the population.
As to shooting down, that is up to each victim, but lex talionis can be applied in less extreme but also effective ways.
A significant issue in an Obama reelection campaign may be whether black-on-white crime has increased noticeably beyond the current level, which is about 35 times greater than white-on-black crime. That is, if the opposing candidate is willing to deal with reality, unlike John McCain.
#17 says from the heart to #12 what I can chiefly say from the mind, not having been directly suckered by Madoff, only smacked like all of us by what little we put into the Safe System to meet our future need.
What the Madoffs do is very like AIDS. They integrate their little self-aggrandizing code into the financial system, which however well-watched by its immune systems of regulators and investors’ own suspicion, is ultimately based on trust. And they use up that trust as HIV eats up the cells it occupies, and bring the whole thing down.
As with the virus, they don’t mean harm. They are just –making a living. And those of us who also want to make a living, but an honest one, should give these creatures no quarter. Us or them, always.
Bernard L. Madoff, a former chairman of the NASDAQ…
That’s what jumped out at me. Foxes. Henhouses.
A down economy sure does squeeze the puss out of the pimple.
What Brokebloke #17 said.
I’ll be attempting to re-enter the workforce after Christmas. My retirement savings are diminished by 1/3. Remainder put into Treasuries, which means, of course, I will lose money once the printing presses shift into high gear. But then again, smart people say deflation is as likely as inflation.
And then on top of the economics, you have doomsday scenarios in respected publications like the WSJ. And look whose hand is on the nation’s executive office tiller.
Loser talk? Maybe it’s best never to take counsel of your fears. But the notion of stocking up on food and ammo doesn’t sound silly anymore.
Ledger: I grandmother once said, “The democrats have looted this nation.” I am beginning to think she is correct
No, it’s a co-production. First of all, the GOP had both houses of Congress AND the White House from 2000 to 2006 (except for a brief period from May 2001 to the end of 2002 when the Pubs lost the Senate due to the defection of Jeffords). It was Republicans like John McCain who ladled $140 billion in new pork on top of the $700 billion TARP bill (which resulted in my own defection to Libertarian Bob Barr). Under Bush the government grew larger and faster than ever before in US history, whether the Pubs held the purse strings or the Donks did. So I don’t want to hear that one party is more fiscally responsible than the other, or one party “looted” America. They both did.
re:
Comment #4
“ LoserTalk Radio ”
has a nice ring to it…
The real problem is more ethical, spiritual and moral than financial and economical. That the system was weighted and full of loopholes may be true but the real issue is the legions of thieves in Brooks Brothers suits who felt no compunction about plundering other peoples’ wealth and investments. The Barbarians in the hood steal chump change. These guys stole the heart out of our system. Ridgerunner ,the bulk of the crime is black on black. Here in Tucson it’s Latino on Latino.
The protestations of the Big 3 Automakers that all their current problems are due to the financial meltdown show them to be running a Ponzi scheme that dwarfs anything done before.
As long as they were selling enough big cars to pay their legacy expenses and cover the fact that could not afford to build small cars and make a profit they were fine. When that scam hit a bump it all fell apart.
And relative to Wretchard’s No.4 comment, I quote Robert Heinlein: “The guy who goes broke in a big way never misses a meal; its the guy who is short half a buck that has to tighten his belt.”
Back in the 80’s a friend who had recently completed his Masters at USC observed that the engineering department had a predominance of foreign students but that “the people studying to be investment bankers were all Americans.” I am hoping that the financial meltdown – and non-meltdown of foreign carmakers – will at last end the mystique of the people who use other people’s money to become rich but produce nothing on their own. Let them all end their careers saying “Do you want fries with that?”
The Dem’s Chickens are coming home to roost!
Back in the late nineties, I recall Nina Tottenberg (or another female NPR interviewer) interviewed Hillary Clinton. On the air, in front of the entire nation, Hillary excused liars by saying flippantly, “Everybody lies.”
This was around the time of her husband’s impeachment proceedings, and the family, its “party,” and the entire machine devoted to propagating the party in power, all were concentrated on de-emphasizing the importance of honesty, and on excusing a politician’s lies.
And, just like a NY Senator can “talk down” a national bank-brand, the nation’s CEO can “talk down” a nation’s ethics.
The personalities that peopled the Clinton’s governing offices were, supposedly, the models that our democracy elevated to the public pedestal for us to imitate. With the advantage of hind-sight, we can more clearly judge the character Bill Clinton’s presidency and wonder whether we can honestly say that we are surprised that CEO’s and governing boards in every sector of our society (ex. GM, et al) emulated these models?
I think we all ‘felt’ this coming, but were only constrained in our individual abilities to describe the feeling clearly.
Wretchard said: “….that neither intelligence nor hard work, contrary to rumor, are the real ingredients to success in this world.”
Here’s a little mathematical formula that might help support your position:
If:
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z is represented as:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26.
Then:
H-A-R-D-W-O-R-K
8+1+18+4+23+15+18+11 = 98%
and
K-N-O-W-L-E-D-G-E
11+14+15+23+12+5+4+7+5 = 96%
But ,
A-T-T-I-T-U-D-E
1+20+20+9+20+21+4+5 = 100%
And,
B-U-L-L-S-H-I-T
2+21+12+12+19+8+9+20 = 103%
AND, look how far ass kissing will take you.
A-S-S-K-I-S-S-I-N-G
1+19+19+11+9+19+19+9+14+7 = 118%
So, one can conclude with mathematical certainty, that while Hard work and Knowledge will get you close, and Attitude will get you there, its the Bullshit and Ass-Kissing that will put you over the top.
How about this? The Executive Branch orders an immediate IRS audit of every sitting elected official, including judges. The audit will go back 7 years. All the resources of the IRS will be devoted exclusively to this task. Any elected official found cheating above $5,000 will be subject to “automatic and immediate recall.
#31 Geoffgo,
A pleasant daydream sir, but only that. I’m afraid the pay to play goes all the way to the top. The true balance of power is the guilt and fear that if any one rocks the boat that they’ll all end up wet in the end.
It’s a systemic infection, a macro of the entertaining little drama we have playing out here in Illinois. Entertaining in the sense that it’s the only value I’ll realize from all my tax dollars forwarded over the years. Have to take what’s given, even if it’s only the discomfort of the deserving.
I read it again above so I’ll say it again as well… Buy the things now that you might find yourself wanting and can’t get later due to legislation.
The reason it’s difficult to cheat an honest man is that most cons involve getting the mark to do something unethical, or even illegal. Then when the mark discovers that something is amiss, it’s hard for him to go to the cops.
Paybacks are a bitch. The UAW only gave a combined $12,500 to the Republican Senators from states like Kentucky and Tennessee were they’re building riceburner plants like gangbusters, and now they want those same Senators to kick GM another $15 billion of debt to go on top of the $62 billion of debt they already have? No, no no. That’s not how politics works. Ask Governor Blogo.
This is why I thought the financial system bailout was wrong.
The industry is gone. Who in their right mind will entrust their money to these thieves?
ridgerunner says it. If I want my money to make money, I must make it myself. If I give it to someone else to make money with, they will benefit, not me. And I might lose it all.
This is going to be good for the economy as a whole. Instead of pouring billions into the black hole of the investment industry which then has to chase returns, people will be forced to think of ways of using their money for a return. Develop new products. Develop new industrial processes. Build things, make things, sell things. Maybe have to think past the next financial statement.
Duh.
Derek
trangbang68, within a 50 mile radius of where I live and in the last six months, there have been four execution-style murders of Caucasian convenience store clerks by black robbers. None was resisting the holdup. If the races were reversed, there would be claims of attempted genocide. Don’t tell me that black-on-white crime is not an issue.
A number of years ago, I received a cold call from a woman asking me to let her manage my retirement account. When I declined, she asked if I already had such an account, I said yes, but deliberately refused to provide any details. Then she became more aggressive and suggested that I was irresponsibly putting my and my family’s financial future is jeopardy. At that point, I became uncharacteristically (for me) aggressive and asked her why I should trust my money to someone I had never met and whose personal principles I knew nothing about. She defended herself by telling me that professional management of personal finances was an honorable business, that I had nothing to fear by letting someone professionally trained handle my investment portfolio. In recent weeks, I have wondered if the same scenario were to play out today, what the cold-caller would be saying.
As you all have spent time discussing the scum of the earth here so far, I would like to praise the courage of the US Senators who voted down the Big 3 bailout. I realize that they weren’t necessarily altruistic in every case, but I appreciate these folks (although I choose to except Harry Reid) for taking a stand. If nothing else, its a start towards draining the swamp. By name, they are:
Democrats No
Baucus, Mont.; Lincoln, Ark.; Reid, Nev.; Tester, Mont.
Republicans No
Allard, Colo.; Barrasso, Wyo.; Bennett, Utah; Bunning, Ky.; Burr, N.C.; Chambliss, Ga.; Coburn, Okla.; Cochran, Miss.; Coleman, Minn.; Corker, Tenn.; Crapo, Idaho; DeMint, S.C.; Ensign, Nev.; Enzi, Wyo.; Grassley, Iowa; Gregg, N.H.; Hatch, Utah; Hutchison, Texas; Inhofe, Okla.; Isakson, Ga.; Kyl, Ariz.; Martinez, Fla.; McCain, Ariz.; McConnell, Ky.; Murkowski, Alaska; Roberts, Kan.; Sessions, Ala.; Shelby, Ala.; Thune, S.D.; Vitter, La.; Wicker, Miss.
“”"”"”"If the GOP doesn’t shake the label of being in the tank for Wall Street they’ll never win an election in this century.”"”"”"”"
The GOP ought to be able to do that because it is now, and has been for some time, the Democrats who are in the tank for Wall Street, and big business too. I think it can safely be said that a majority of America’s uber-rich are staunch Democrats and wealthy RINOS have switched sides as well. It is laughable to me that Wall Street in particular is still considered a “Republican bastion.” In Manhattan? Are you kidding? This seismic shift went largely unnoticed as it occurred in recent years. The problem is, the Republicans are boobs and can’t effectively make the case for this sea-change of realignment, and the public — snowed by deliberate media distortion — will take many years to figure this out.
“”"”"”"So I don’t want to hear that one party is more fiscally responsible than the other, or one party “looted” America. They both did.”"”"”"”"
Correct. This also, sadly, points out that the Republicans are frauds.
The Democrats are merely white-collar criminals.
I worked at the National Association of Securities Dealers (NASD) as a securities examiner from mid-80′s to mid-90′s. NASDAQ is a the automated trading system; but the NASD (now known as FINRA) is the regulatory body for member broker-dealers.did the annual audits of Madoff Securities, Inc. The Madoff brothers, (pronounced MADE-off; not Mad-off; incidently)Bernie and Peter
Madoff held an annual cocktail cruise on their private yacht for NASD management and mid-managers. Both Madoffs were very active on District 12(NY) Disciplinary Business Conduct Committees, which recommended sanctions against B/D’s accused of wrong-doing. This is how you get ‘golden’.
Don’t tell me that black-on-white crime is not an issue.
What he said was that “the bulk of crime is black on black” – and as far as violent crime goes, I believe the stats bear him out.
It’s not that black-on-white crime isn’t an issue … it’s that black-on-black crime is THE issue and is ignored & denied as such by too many, black, white & other.
There are lots of ironies, subtleties & tragedies buried in those statistics. As long as racism is falsely claimed as the #1 impediment to black progress in America, the real problems (fatherlessness, which leads to higher percentages of poor school performance, antisocial and criminal behavior, including black-on-black violent crime, a level of fear and insular culture [no snitching, don't cooperate with the cops] in inner-city neighborhoods that leads to a toleration of levels of violent crime that are completely intolerable everywhere else … and, of course, unwed motherhood, which is coupled with fatherlessness and starts the cycle all over again) will get ignored. And nothing will change for the better; it will only get worse.
Here in Pittsburgh the black-on-black crime is really bad. In the last 12-18 months, it seems like at least two to three times a week, someone (who is almost always a brother) is getting shot. Homewood, North Side, the Hill, Mt. Oliver, Wilkinsburg … different vics but almost always the same neighborhoods. And the increase-the-peace marches & candle light vigils & funerals, nor the churches on every other block in Wilkinsburg, don’t seem to make a dent in any of it.
When I (white) was robbed at gunpoint by two assailants (black) two years ago at a Port Authority park-and-ride, I at least had the resources to move to a safer suburb. A lot of people can’t get out.
Agree with trangbang in 25 that the problem is really a moral-spiritual one, not a financial one. That thievery & lawlessness are not (or are no longer perceived to be) fringe behavior … that the law & justice system isn’t able to deal satisfactorily with obvious criminals (neither the ones with guns nor the ones in suits) … that historically unprecedented affluence in America exists alongside rampant divorce, substance abuse, a dearth of effective parenting … all this suggests a deep & pervasive spiritual rot, a national disease of which Madoff and Blagojevich are but individual pustules.
Sorry … forgot to close out the italics, AGAIN.
Only first line of #42 was a quotation of previous poster. The rest was mine.
I thought you were going another direction with this article- in my mind, the age of pyramids was a time when the pharoh’s built giant infrastructure projects using slave labor, all while building up a cultist like personal power. Of course, that sounds like now too!
The second amendment does not abrogate the rights of fellow citizens to a fair and speedy trial, but it would tend to put a fair amount of speed into the process.
I am sure I do not know what the machinations of Madoff, former NASDAQ Chairman, has to do with black on black or black on blue or blue on blue heartache to heartache crimes…
… But while I would be remiss not to apply second amendment rights when dealing in the realm of the latter I am beginning to think it should be a matter of due diligence to exercise the right to bear arms when dealing with the former, or anyone associated with the fannies of mae and/or mac.
Now I know that it does not guarantee the straight, it does narrow the focus, trust being a give and take proposition and all.
As long as racism is falsely claimed as the #1 impediment to black progress in America, the real problems… will get ignored.
Absolutely true. Fortunately, racism just ended in America, so no one can claim it anymore as an excuse. Yes we did.
And as a result of the end of racism, we will see in the next few years that the following changes down in the hood: nothing, nothing, nothing at all.
“Fortunately, racism just ended in America, so no one can claim it anymore as an excuse.”
Racism has not ended in Amercia. In fact it has recently gotten much worse. When was the last time we had a person elected President of the country just because he was WHITE?
@15 ridgerunner
Regarding Lex telionas, author George MacDonald Fraser and the history and culture of the Scottish Borderers, may I recommend his history of same:
“The Steel Bonnets: The Story of the Anglo-Scottish Border Reivers”
It is, I believe of sufficient depth to interest not just those of us whose origins arose therein and an appropriate companion “The Candlemas Road”
Often now, unbidden, when reading the events unfolding here and elsewhere, a tune from my youth that I have with me still, rises from within to accompany my reading.
In part: “…hope you’ve got your things together, hope you are quite prepared to die, looks like we’re in for nasty weather……..”:
I often hum along.
Its catchy and there’s no point being morose.
Regards
“As long as racism is falsely claimed as the #1 impediment to black progress in America, the real problems… will get ignored.
Absolutely true. Fortunately, racism just ended in America, so no one can claim it anymore as an excuse. Yes we did.
And as a result of the end of racism, we will see in the next few years that the following changes down in the hood: nothing, nothing, nothing at all.”
I disagree strongly. Not only has racism NOT ended – it is about to become much worse. 0bama is a walking contradiction – a “post racialist” when he deals with the White yuppie demographic and the usual grievance-mongerer when dealing with the Black and Hispanic elements of his constituency.
His old-school Chicago Politics is not hope and change – it is racial tribalism. It harkens back to Boss Tweed & friends defrauding the public prior to the 20th Century. Once again we have corrupt ethnic pol’s dividing up the treasury for their ethnic cronies’ benefit. On top of this is pro-AA legislation, minority set-asides, quotas, diversity initiatives, etc etc ad infinitum.
This works fine when times are good. A robust economy generates enough revenue for private sector employers to bear the diversity shakedown. Give the Urban League and La Raza and the Human Rights Coalition their cut and they stay off your back. Set up a sinecure or two for underqualified minorities and gays – after all, the Evil White Men will pick up the slack just fine.
If only we WERE in good times. 6-12 months from now and I wonder if people are still going to tolerate the diversity-mongerers’ antics. Our Government and to a lesser degree the private sector are laboring under a diversity tax, on top of the other taxes that the Magic Negro wants to impose. This means everyone had better start playing for keeps – and soon. The urban whites 0bama depended on for his victory are going to be in intense competition with the “diversity” hires as companies start trimming the fat. This economic competition will be the prelude to some pretty ugly urban racial conflicts as people realize that they aren’t guaranteed the upward mobility they’ve come to expect. To guide us through this maelstrom we’ve got an Affirmative Action C-in-C who, to put it mildly, is in over his jug-eared little head. Perhaps he thinks he can vote “present” and kick the can to somebody else – it’s what he’s always done.
White/minority relations aren’t the only problem. Also keep your eyes on relations between minorities – especially Hispanics and Blacks. Take a look at what’s been going on in LA. There is a low-level war as new Latino immigrants drive out Blacks and other established minorities. A large percentage of murders in certain areas of Los Angeles are racially motivated. Plus, Hispanics undercut wages for Blacks by competing for blue collar jobs. In the East Coast city where I go to school, professions that were the mainstay for black males without college degrees (trucker/public transit driver, construction worker, maintenance man, janitor) are slowly becoming Hispanicized. Things are probably even worse in areas closer to the border (TX, CA, etc.)This displacement in turn creates a pool of angry black men with little to do. Great news, eh?
In response to these impending crises 0bama keeps spouting the same pan-racial garbage that worked on the campaign trail. The only concrete economic plans I’ve been able to divine from him are “green jobs” (utterly laughable) and public sector employment (which must be paid for either by printing money or by raising taxes on the private sector). Small wonder that white supremacists are happy to see 0bama elected. They suspect (rightly) that the combination of higher taxes, higher inflation, and increased racial unrest will make far-right political parties viable once more. Something to keep in mind if you’re a mainstream Republican who thinks 0bama’s incompetence necessarily means a big win for the GOP in 2010 and/or 2012.
Some links about the situation in California:
http://www.youtube.com/watch?v=x5t_Di6a6NM
http://www.youtube.com/watch?v=EvCwQwKvlT0
http://www.youtube.com/watch?v=-SNBUe52zYc
http://www.youtube.com/watch?v=EQISeexjqgA
OT, but not.
A Constitutional Conference is a distinct possibility, and it can rewrite ANYTHING and EVERYTHING.
http://tinyurl.com/ConstitutionalConvention
Pass the word.
corr: Convention, not Conference.
This is the real deal, folks.
Some months back, I suggested that a “Continental” Congress would be a way to press the U.S. Congress for solutions to the nation’s unresolved problems, e.g., open borders, deficit spending. That suggestion was roundly critized. Leo Linbeck instead argued for a Constitutional Convention. Apparently, he may get his wish, with the attendant dangers thereof.
“critized” = “criticized”
bogie;
Here’s a little trick for most tags: type the open and close tag first, then paste text between.
It is explained by the sociopath’s absolute conviction that he is somehow immune from being caught.
This appears to be connected to the sociopath’s trait of confusing his lies with reality.
Unable to distinguish between the two, he proceeds on his brazen way, willing, like Richard Widmark in “Kiss of Death,” to push a wheel-chaired old lady down a flight of stairs to gain his purposes.
Gaylin reminds us that sociopaths are not always obvious misfits, as evidenced by their being found, for example, running major institutions. Often they have the acting skills of award-winning thespians, can exhibit great charm (though not in this case) and can fool even experts.
To give but one example of the bizarre and extreme forms of the disease, I cite a case from Cleckley’s famous work on the subject,
“The Mask of Sanity”:
A man having been lengthily and apparently successfully treated for sociopathy, was at long last released.
His relatives delighted in his apparent recovery, the resumption of good grooming, the return of his cheerful personality, and his entertaining and humorous discourse, polite manners and social affability.
Some weeks into his recovered freedom — at his sister’s wedding — he politely made his way along a row of seated wedding guests to the aisle.
There, he defecated.
Does this mean there can be more surprises in store from the governor?
How’s That Again, Guv
A Constitutional Convention in this climate? Don’t think so. Surely it would lead to the codification of everything from sodomy to reparations. The conference itself would make a Marx Brothers movie seem tame and staid. It would be a hoot if the results weren’t so tragic.
One pound of flesh after another.
This anti-Palin garbage is beyond belief. As realistic, disillusioned and cynical as I am about the Democrats, I am still amazed by this — it truly is upsetting that we have sunk so low as a nation. The comments are amazing on that Cavett link.
She is becoming the new Bush. I understand the Left’s propagandists’ brief and strategies, but I think the rank and file really believe this nonsense; I think that they need no prompting or guidance in the matter. I hear it all the time.
It really is psychotic (and juvenile). I am not joking, it speaks of real mental dysfunction.
What is with these people? Palin was (is?) a breathe of fresh air. We could use 50 of her.
We seem to have reached a tipping point where we cannot separate fantasy from reality, rhetoric from plain talk, and truth from lies.
A sad day. How things have changed since the age of Reagan.
I believe (hope, pray) that we’re simply at the far arc of the pendulum.
If so, we’ve got to be prepared to capitalize once it swings back. (e.g., When Barney Frank spews “Don’t you believe in welfare?”, have a ready, calm, powerful answer.)
We had Reagan (and Margaret the Baptist) waiting last time. Need to be sure we have heroes ready again. (Why do I think they may be Asians from Louisiana?)
As to the lovely Sarah, my guess is she’ll be to the Left what Hillary was to Sean, et al. “Stop Hillary Express”, my ass.
Derek’s point is excellent. We have large numbers of talented people who have been sucked into the financial services industry because it was personally financially rewarding. The bonuses paid to high-performers were staggering, and the prospect of achieving these outsized payouts drew in people who aspired to the lifestyle those payouts could support. Jets, yachts, multiple houses, big parties, etc.
In this respect, hedge funds and investment banking are (were?) to the white middle class kid what the NBA and hip hop are to the black kid in the hood. The promise of inconceivable riches and a life of consumption.
The result has been a massive misallocation of human capital that has both individual and societal implications. For the individual, there are hours spent working in pursuit of a very low-probability goal, hours that could have been spent preparing them for a truly productive role in society. For society, we end up with a “tournament culture,” in which we have 1 winner and 63 losers.
Tournament compensation structures are well-known to have two organizational effects. First, they dramatically increase internal competition. The incentive to collaborate with my colleagues is eliminated since participants must eventually vanquish my collaborators. The resulting each-man-for-himself culture results in loneliness for all involved (especially the winner – the losers at least can hang out at the bar together), and missed opportunities for mutual gain.
The second effect is an increase in cheating. If the payoff is large, participants have a strong incentive to try to break the rules to reach the top. This means that “winner” increasingly becomes synonymous with “cheater” and after a while everyone gives up on the game. Even legitimate achievement gets tarred with this brush, and the system breaks down.
A good example of this effect is competitive cycling. There is now no trust that winners are legitimate; the only question is what method they used to keep from being caught by the doping police.
Many parts of the financial services industry are populated by people who use their intellectual gifts to figure out how to identify and capitalize on arbitrage opportunities, that is situations where prices do not reflect underlying asset values, which are determined by future cash flows. But cash flow is ultimately generated by selling goods and services to customers for more money than it costs to produce them. No goods and services, no cash flow. No cash flow, no asset value.
I met this week with a man who makes beautiful custom guitars for musicians like Paul Simon and Mark Knopfler. He’s pretty much a one-man operation, working out of a workshop in his garage. He makes about 26 instruments each year, and has two years of orders in backlog. Over the years, he had his ups and downs, but is doing OK now and wants to figure out how to grow. He has friends who suggest that he raise some money to expand his operation, buy more equipment, etc. He worried, however, that no bank would lend him money for expansion, and was nervous about bringing in equity partners.
We talked for a while about his operation, and as he described the process it became clear that the bottleneck was in the assembly process. He was actually quite sophisticated – he did his designs using a CAD program, and had purchased a small CNC milling machine to make guitar components. But the assembly process was time-intensive. It required someone to glue together the many components, and the assembly had to be done in a certain order and you had to wait for each subassembly to cure before you could work on the next step.
After sketching out this process, we then roughly calculated that if he hired one additional guy at a cost of about $40,000 per year he could double his total production. This was worth about $100,000 of additional annual cash flow (net of the additional expense), and he didn’t need to raise a penny from anyone.
We then talked about what such a change would mean. He could take more orders, deliver them more quickly to his customers, increase his earnings, create more designs (which is the part he really loves and is the really high value-added operation), hire more workers, maybe move to a bigger workshop, and – most importantly to him – have more great music created with his instruments. Back of the envelope, if he can manage through these changes, he could end up making $200-300K per year within 5 years, doing something he really loves.
He left surprised and delighted, and was heading back to his shop to begin reorganizing his workspace to make room for one more assembly operation. He asked me to stop by the shop next year after the changes were made. I plan to take my 14 year-old son with me – he’s a pretty good guitar player – to see what the “real” economy looks like.
The point here is that we have been living in a period over the past 30 years when financial capital was more highly valued than human capital. We have over-invested in paper, and under-invested in people. That is changing, and the change will be very painful for many people. But the results will be much better in the long run for those who actually deliver the products and services that drive our economy.
One final point: I find it interesting that many of Madoff’s victims interviewed by reporters were living off of the proceeds of wealth generated by others: children, widows, divorcees, heirs, trust-fund babies, etc. These people were disconnected from the value-creation process that actually generated the wealth that now supported them.
Now, it is possible that they watched the “value creator” who generated the wealth – their grandfather or husband or dad – hobnob with other rich people at Palm Beach parties, thinking that their dad was talking about skiing in Switzerland or their new Mercedes, since that was what they were talking about. What they didn’t know is that dad was negotiating the purchase of a company that could add a new product line that their sales force could sell, or an engineering capability they could use to push into a new market segment. So later, after dad was dead, when some member of the “club” approaches them about managing their money, it would only be natural to trust him. After all, he must be like dad. So do some due diligence? Why go through all that effort? The winds are good today, and the catamaran beckons…
Thus, inexorably, passive financial capital decays, and the passive rich are made poorer.
True financial returns come from hard work – analysis, due diligence, skepticism, and continuous monitoring. Good investors are workers. Bad investors are marks.
Financial and human capital are inextricably intertwined. Investment generates true returns only when people are using it productively, and that can only be determined by close inspection of the people – and that takes work. The further that financial capital disconnects from human capital, the less likely that it will productively invested in real value-added activities, and the more likely it is to fall victim to fraud and malfeasance.
It is comforting know, however, that 5 years from now my friend the lutier will be enjoying a good living, while Madoff will be doing laundry for his cellmates.
L3
OK, Madoff is a fool and a fraud and has been for twenty years or more, BUT here’s something – he’s been covering for his investors’ losses for the last year or so. He’s a regular Santa Claus, right? Er, no. A Ponzi scheme always has to go up, as soon as it starts to sink and investors want to pull capital, it collapses.
And really, someone tell me, what is it that Madoff is accused of, that Citibank has not been doing on a scale 100x larger?
L3: interesting post. A friend of mine has a son that is an apprentice to a world class lutier (woodwinds).
However, I will say that Wall Street does not have a great deal of “Mute and Inglorious Miltons” hanging about.
I have consulted a great deal on The Street, and the kind of intelligence that I have mostly encountered there is of a narrow kind in general, or is focused so at least. Yes, there are some amazingly bright people there, but their “intellectual spirit” has been, in a way, corrupted. It has had the creative vision sucked out of it (and, too a degree, the pride in workmanship). I am not sure how useful some of these folks are in an economy that truly rewards real added value.
From my vantage the bright ones tend to be at a mid level to low upper level of support or strategy: Math and tech geeks, with a smattering of financial geeks. The sales folk, MBAs, politicians, traders, dealmakers and the financial strategist — and here I mean the ones that think up the “high concept” scams — are completely money/power/status driven and I would not include many of them in this “brighter” group as I doubt they could even work an honest day in their lives.
Some people might be surprised to learn that parts of Wall Street are extremely drab, tough, hierarchical and regimented places to work in. The truly creative tend to self-select out of there, or get canned soon enough should they actually venture an honest opinion to the wrong “manager”. There is some exquisite math used on the street, but most of the fundamentals of that math has been created elsewhere. Also, the use of technology has really been groundbreaking in the tech indistry; sometimes I think that only the government has more bleeding edge implementation than Wall Street does, so there is some actual creativity here; it is often done by contractors, however, many of which have the real geeks offshore. I wonder though how all of this applies to other industries in a resurgent economy that has sound notions about true wealth creation.
Paradoxically, though a lot of jobs on wall street require a lot of effort, they are “easy jobs” when compared to other fields where one is selling one’s intelligence and creativity.
Contrast it with Chip designers, Software vendors, your lutier or the people he creates his instruments for. Wall Streeters do not have that sort of skin in the game, nor take that long a view of the fruits of their “labors”.
Wall street has a pretty short memory and is rather incestuous — once in, it is easy to move around. It is a peculiar industry.
That is not to say that there are not major exception both in terms of individuals or firms, but people like R. Rubin and firms like Citi or GS are mostly the norm. I am of course not talking about regional financial people here. I am sure that there are many honorable , hard working and bright people out there. I am talking about the big city, big money center firms, their supporting firms and the hedgies.
BTW, I know a bunch of Hedge Funds that are actually hiring — guess they had some pretty interesting rick management programs, eh?
rick=risk (well maybe that too)
Leo: As I said in my No.27 post it would be a good thing is all the recent mess ended the allure of the financial industry to young people, both in terms of get-rich-quick schemes and its saintly halo.
And relative to you example of the guitar-maker, I offer an example I heard of in the mid-70’s
A man in a town on Oklahoma found that he had more work than he could do, believe it or not, repairing and custom building screen doors.
He hired a couple of workers to enable him to expand his business. But after a while he found that he had to spend too much of his time taking care of the paperwork associated with those hired workers. And that is not what he wanted to do; he enjoyed working with his hands and actually creating physical objects. He did not go into business to become a clerk.
So he fired the two guys he hired and resolved to just make as much money as he could doing as much work as he could by himself, and enjoy it much more. He lost money, the workers lost their jobs, his customers lost a capability they desired to purchase, and, of course, the government lost tax revenue.
I cannot imagine things have gotten simpler for employers since 1975, especially in regards to government requirements. The Americans with Disabilities Act alone must be odious, and the Labor Dept has undertaken to impose some ridiculous penalties on small business for alleged discrimination.
I know nothing about finance. However I’ve read an interesting (and slightly out of date) book about the world of international finance titled:
“Traders guns & Money, Knowns and Unknowns in the dazzling World of Derivatives” by Satyajit Das.
Again, my perspective is one of near complete total ignorance. However my impression was the people in this industry were looking for any weakness or loophole in the financial system that they could exploit to make lots of money. Much of what they did was almost always cynical, often immoral and sometimes illegal. The line between immoral and illegal was very ill defined mainly because the subject was so complex. A point that Das made in his book was the people in the finance industry deliberately made the subject as complicated as possible to protect against regulation and to draw in suckers. There also was this attitude that Das revealed that was similar to that of the con artists in the movie “The Sting”. Stealing from their customer/marks through convoluted deceptions seems to have been a deliberate part of the business. Many of these big time grifters have become immensely wealthy (only the unlucky or stupid ones got caught). Sadly, I think most of these people are going to end up keeping their money.
Different topic: Looks like the UAW is setting itself up as “lead lemming” for the automobile industry. Soon the UAW’s members will have the distinction of having high wages and benefits on paper but unable to enjoy them because their industry has imploded. It’s amazing how stupid people can be.
Not so complicated, I think. “People” knew Madoff’s books were off – strength and consistency of returns, coupled with backwards pencil accounting that didn’t support his revenue streams, coupled with some light investigation (the “auditor” had a very small office with a phone). These same “people” thought it was insider-trading. Some of them still invested.
The Eyes Wide Shut mentality and connecting with the golden goose being reminiscent of the Enron shareholders who put all their savings into One Big Kill.
This is same-old same-old stuff – with bigger price tag – but SEC should be sweating pretty good. Rightly so.
We waste too much time obsessing over what makes a bad guy bad (I honestly don’t care) – time better spent making enforcement and punishment more compelling – give the bad guys enough time to figure it out for themselves.
Slade and Eggplant:
Recall Enron? After it crashed Jesse Jackson was leading marches to recover the employees’ retirement pay. But in reality many of not most of those wailing employees had know full well that they were part of a huge scam. One described how when an influential visitor would come for a tour they would all rush to man a “trading center” in which the dozens of people on the phone were in fact just talking to one another. And they were shocked when this scam crashed?
And as for the financial industry making things complicated on purpose – have you ever looked at the U.S. Tax Code? That is no doubt a big, big driver in their elaborate machinations – as were laws like the Community Reinvestment Act. “So we have to lose money on loans? How can we game that?” Like the farmers in the USSR feeding their cows bread instead of grain, people WILL find a way.
Also, my experience in the DC environment has led me to understand that there are many people there for whom complexity is not a necessary evil but an end in itself. More complexity = more bureaucrats = more opportunities for advancement.
“Back in the 80’s a friend who had recently completed his Masters at USC observed that the engineering department had a predominance of foreign students but that “the people studying to be investment bankers were all Americans.” I am hoping that the financial meltdown – and non-meltdown of foreign carmakers – will at last end the mystique of the people who use other people’s money to become rich but produce nothing on their own…” –RWE
That is not the case. Further I doubt Engineering and Finance students would interact much. I was at USC in the late 80s and early 90s and the predominance of foreign students was equally represented in accounting, finance and investment banking – and equally as greedy. The predominance of foreign students in Business and Accounting schools were Asian (yes, there is a separate Accounting School). From my personal experience they were there to learn the internals of American Financial system for their own benefit and numbers were easier to present than exploded diagrams and long papers on the crystal structures and the tensile strength of various metals.
Some accounting classes had a majority of Asian students and others it was in the high 40% range. There were about 30% to 35% American Caucasian and another 5% to 10% foreign Caucasian students, the rest of the student body were Hispanic, Indian, and black.
The Leventhal School of Accounting and Accounting Library are separate buildings from the Crocker Business Library and Hoffman Hall where the MBA students congregate. A side note, a number of movies were filmed and around the School of Accounting for some odd reason.
The USC School of Engineering including the Rapp Engineering building is on Watt Ave. and not close to University Ave/Trousdale Pkwy where the respective schools of Accounting and Business are located. It would take a lot of leg work to compare the Accounting/business student to the engineering students.
It’s true that all students have to take General Education classes around the entire campus but the Masters/PhD students from Accounting/Business school and their counterparts from Engineering school would not mix much.
Foreign students are just as greedy as domestic students – it’s a smear to say other wise. As an old accounting Professor used to say “All of the audit failures are splashed across the TV screens and all of the audit successes go un-recognized.”
One, last note, because of the severity of the Rodney King riots and the fact that classes were still going during the riots all of the male accounting/finance students I associated with carried heat. I also assume that is true for the engineering students.
RWE,
Good story. It’s easy to understand why someone would make this tradeoff. The amount of compliance required (and risk one assumes) when hiring someone is pretty depressing. There are huge companies (e.g. Administaff) that make a sizable fortune dealing with this stuff for small US businesses.
The only good thing is that it’s much, much worse in Europe. At this point, anyway…
Cheers.
L3
A late footnote.
Madoff and Enron are not in the same league as the Revelations of Sep/Oct 2008. The Madoff/Enron scandals were tolerated as the “price to play” – sporadic eruptions of dysfunction that will never be eradicated – not the systemic rot officially being blamed on housing legislation. The “legacy costs” of the 2008 financial collapse (and it’s going to get worse before it gets better – don’t look for a good 2009) are deeper – progressive policy, reserve banking, globalized markets rocked with “dark” money, currency manipulation, and labor dislocation, political insularity, and AWOL political parties as the middle class disappears. That’s a condemnation of the Bigger Picture.
Madoff is a peanut picker. What came out in 2008 made my eyeballs bulge. And I will never forgive myself or forget not paying attention.
@Mongoose,
If you know a Hedge Fund that is hiring I am looking for work.
You know, folks who are talking about an Obama “reelection campaign” are a bit premature. He has not even been elected yet, much less inaugurated. He may not be the next president. It’s unlikely, but it is possible. I certainly will continue to do all that I possibly can to remove him from office if he wins the Electoral College and is inaugurated. It saddens me that people are thinking in terms of his being president for four years. In fact, I am outraged.
I live in a South American country, plagued with violence and corruption, and stigmatized for that.
Where does the ” good example” come from? Wall Street moralists? Audit firms ? Regulators ? Some oligarchies of the Western world are exporting a new set of values : greed, ruthlessness, and economic violence, inducing social disasters. Be sure that using the taxpayer’s money, they are going on, trying to make it back. But after all, in developed countries, we have the elites we deserve, right? A.