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henrye

Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #75 on: December 15, 2008, 06:56:06 PM »
HenryE,

You are right about not having much of a defense ("other smart people did it too"), and that is why a good attorney is a necessity.  A lazy, incompetent, but otherwise honest man can do little for restitution sitting in jail.  I hope I am wrong, but I bet these advisors don't have the insurance or assets to make Madoff's "victims" anywhere close to whole.

Being honest, lazy & incompetent is not a criminal offense.  Unless they were aware of Madoff's fraud, there's no reason they would go to jail.  As for whether or not the advisors have the assets to make their clients whole, I'd say it's about 50%.  Certainly the big guys like HSBC & Paribas have the capability.  Let's see if they do the right thing or take your suggestion of hiring legal representation to defend against their own clients.

C. Squier

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #76 on: December 15, 2008, 07:04:29 PM »
Nobody is saying that there aren't any money managers out there who cannot "beat the market". What math and statistics tells us, however, is that people who are "beating" the market are just lucky, not skilled.

Let me put it in a simple way. If you have 1,000 people flip a coin 10 times and have people call it while in the air, you are going to have a few people who will correctly predict the results all 10 times just by the odds. However, those people may believe that they have an uncanny ability to predict the coin flip instead of realizing that they were just lucky.



Richard, you're assuming every investment is like a fair, double sided coin.  They're not.  They have variables which determine their future performance.  Some people happen to be better than others at predicting these variables, but skill is involved.  It would be nice if public companies were homogenous entities, but they aren't.  Want to flip a coin to see if you get to buy Enron or Berkshire Hathaway?  I don't either.

You also assume that managed funds have the same volitility as index funds.  They do not.  In many cases, much less.  Volatility causes investors to run scared.  The "market" averages it's 10 and change percent, while investors average much less....buy high, sell low.  Investor behavior has a heck of a lot more to do with returns than the fees of a managed fund do.  

Index funds:  your 100% guarantee to always underperform the market.

John Kirk

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #77 on: December 15, 2008, 07:08:20 PM »
Lou,

Fair enough.  I agree.

The best way for a broker/manager to work in your best interests is to take a percentage of your net worth, regardless of transaction fees.  It would still be difficult to verify they were doing what they said they did.

Huh?

I think an investor and advisor/broker best work together if they have a clear and reasonable understanding of each other's objectives and capabilities.  There are hedge funds where the principals invest most of their own personal money right along with their clients.  No one can have even a near perfect record.  And if anyone tells you that they have it all figured out, run the other way.  Today, with governments becoming so active in support of key industries throughout the world (e.g. Germany and VW), even the very best financial people are recalibrating.  Unfortunately, the lessons from the new realities can be very expensive.  Exciting times, wouldn't you say? 

I tried to figure out a better way to type that thought.  I'm not surprised it earned the "?" response.  The money manager's pay should be proportional to the amount of money under management.  I was just trying to say the manager should be incentivized to grow the wealth.

Yes, these are very exciting times.  However, I'm a glass is half empty guy, and see the next fifty years filled with painful adjustments.  I'm betting the farm on the continued proliferation of Internet commerce.

Not to get too far off track, but I see a world filled with unneeded workers.  Automation renders a significant portion of the adult work force unnecessary.  There are also unneeded middlemen in many industries, and people who sell you unhealthy crap.  Call me crazy, but I think as many as 10-20% of the work force is unimportant.  I see permanent high unemployment in the future.  What are we going to do about it?

jeffwarne

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #78 on: December 15, 2008, 07:13:03 PM »
As to brokers not being able to beat the market, you can believe what you want, but given that the maket is an average which reflects both good and bad picks, I think it is reasonable to conclude that there are some brokers who pick more winners than losers and beat that average.  To believe otherwise would lead one to only buy index funds or, as in current times, to remain highly liquid.  But, as I am sure you know, there is even considerable risk in just sticking your money under a matress.

Nobody is saying that there aren't any money managers out there who cannot "beat the market". What math and statistics tells us, however, is that people who are "beating" the market are just lucky, not skilled.

Let me put it in a simple way. If you have 1,000 people flip a coin 10 times and have people call it while in the air, you are going to have a few people who will correctly predict the results all 10 times just by the odds. However, those people may believe that they have an uncanny ability to predict the coin flip instead of realizing that they were just lucky.

That is exactly what happens in the Wall Street. If you have enough money managers, you are going to have many who are very successful and few who are extraordinarily successful. But that is not because they are skilled, it is just a by product of the odds. But I am sure if you interview those money managers, they believe they have an uncanny ability to predict the market.

I will put a caveat that there may be people who are truly talented that they can beat the market average over the long run. However, if you look at the numbers and statistics, these kind of people do not exist more than what statistics would predict (based on random chances). So, far as anyone is concerned, they might as well not exist (because you will never be able to distiguish them from those who are just lucky).

And it is also very naive to believe that just because the money manager takes a percentage of your total net worth, their objective lines with yours. Their objective is to make themselves rich, not you. Making you money is just a byproduct of him getting rich, not his major focus.

Even if those money managers have significant amount of their own money in the game, they may still take WAY too much risk than what they really should take. This is exactly what happened with LTCM. Even though, most of the executives at LTCM had their own money in LTCM, they leveraged 40 to 50 times of their holdings because if they were right, they gained to make 40 to 50 times of their money while if they lost, they only lost what they had. And most of the LTCM customers had no idea that their money was at such risk because all they saw was consistent returns for 4 or 5 years (until it all came crashing).

Index funds are a GREAT way to invest. Certainly better than rolling a dice and getting a money manager. If you figure in the extra cost involved with money managers, 95% of the money managers cannot beat the Index Fund returns. And I will take 95% sure thing over 5% maybe.

If you ever spent some time explaining to a " master of the Universe"

the principles involved in getting the ball airborne....
that his 8 iron doesn't go 150 yards....
that he can't hit it perfect every time.... (actually never)
that his son's drives don't go 300 yards (nor his 250)
that being "good at everything else I do ???" doesn't exempt him from the fundamentals of golf and a realistic practice regimine to improve...
that three on and four putts is not a 5 (disregarding the three mulligans of course)....
that 9 foursomes can't tee off at 8 o'clock on a Saturday...
that he'd be scratch if only he'd started when I had.... (despite 15 years of being a 25)

then you'd have to agree with Richard
"Let's slow the damned greens down a bit, not take the character out of them." Tom Doak
"Take their focus off the grass and put it squarely on interesting golf." Don Mahaffey

John Kirk

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #79 on: December 15, 2008, 07:14:06 PM »

Index funds:  your 100% guarantee to always underperform the market.


True, by 0.12% per year.  Good luck beating that.

C. Squier

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #80 on: December 15, 2008, 07:19:48 PM »

Index funds:  your 100% guarantee to always underperform the market.


True, by 0.12% per year.  Good luck beating that.

But there is much more to it John.  We can't pretend that humans invest in an emotionless world.  In that 10.8% index fund, volatility scares people into selling in times like this.  They're almost guaranteed to miss upside.  Upside that you can't get back.  They'll reinvest again at the peaks. 

Case in point:  The highest mutual fund redemptions of the last decade were in 2002.  The bottom of the market.  The highest mutual fund inflows were in 1999 and 2007, the peaks of the market.  Investors do the opposite of what is right. 

You must not ignore volatility, which index funds excel at.  Give an investor a 10.8% S&P 500 index fund or a 8% balanced fund and 20 years and get out of the way.....they'll do better in the balanced fund.

CPS

John Kirk

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #81 on: December 15, 2008, 07:22:33 PM »
Clint,

At the bottom of your post, it says 95% of all putts left short do not go in.  I believe 100% is a closer estimate.  How can I trust your other thoughts of investing percentages?

Richard Choi

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #82 on: December 15, 2008, 07:22:59 PM »
Richard, you're assuming every investment is like a fair, double sided coin.  They're not.  They have variables which determine their future performance.  Some people happen to be better than others at predicting these variables, but skill is involved.  It would be nice if public companies were homogenous entities, but they aren't.  Want to flip a coin to see if you get to buy Enron or Berkshire Hathaway?  I don't either.

My example was simple just to illustrate the point. But the stock market is a fairly simple system to analyze. You have finite number of companies, and you have historical record on their gains and losses over many years. Based on that data, it is almost trivial to predict how many people will make more money than average based on the data. This kind of analysis produces numbers that are consistent of number of money managers who beat the average. If there were significant number of money managers who are very good at predicting so called variables, we should see a whole lot more people beating the average than the statistical model indicates, but we do not. They are just lucky.

You also assume that managed funds have the same volitility as index funds.  They do not.  In many cases, much less.  Volatility causes investors to run scared.  The "market" averages it's 10 and change percent, while investors average much less....buy high, sell low.  Investor behavior has a heck of a lot more to do with returns than the fees of a managed fund do.  

Volatility is just a function of risk. More risk you take, more volatile you will be. It does not matter if it is a managed fund or an index fund.

Index funds:  your 100% guarantee to always underperform the market.

If this is true, why did a study find that 78% of actively managed funds lagged the returns of the Vanguard 500 Index fund by an average of 2.6% per year?



Steve_ Shaffer

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #83 on: December 15, 2008, 07:25:50 PM »
The Securities Investors Protection Act has been invoked:

http://news.yahoo.com/s/ap/20081215/ap_on_bi_ge/wall_street_arrest
"Some of us worship in churches, some in synagogues, some on golf courses ... "  Adlai Stevenson
Hyman Roth to Michael Corleone: "We're bigger than US Steel."
Ben Hogan “The most important shot in golf is the next one”

Jeff Fortson

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #84 on: December 15, 2008, 07:33:58 PM »
George,

The panics in the 1800s came every 15-20 years or so, and the ones in 1873 and 1893 lasted 4-5 years each.  The depression was longer and harsher, but these were bad enough.  Note that since the great depression, we've had bad recessions in 1972-3 or so (though that was really a different phenomena), and 1980-1982 or so, which was necessary, unfortunately, to ring inflation out of the economy.  I would say that the economic stabilizers resulting from the New Deal have been pretty effective.  Nobody has banned the business cycle (no matter what the supply-siders say), but recessions since the Keynes era began have been less harsh.

Lou,  the least government intervention is best; it should create a level playing field, and let the market do its work.  It must be involved when information costs and other friction can cause really bad things, and that's why we need regulators to do their job.  However, it by definition has a huge influence because it prints the money, and there is no getting away from that.  Decent monetary policy can also help let the market do its work.  However, now we are in a situation where it appears that the market is frozen, and nothing that the fed does will have any influence.  Interest rates are already basically zero, and nobody wants to invest in anything.  That's understandable--when there is this much excess capacity, why create more?  Same goes for tax cuts--folks will just take the money and put it under the bed.  We have already had in effect a huge tax cut with the decline in the price of oil, and its done zippo.  Therefore, in this case, government must make up the difference between output and potential output by spending.  A huge lot.  Quickly.  If it employs folks to do stuff, they will get money, get confidence, and buy things, and those folks will buy things etc. etc.  

This is a very well put post and I agree with it completely. 

edit: the fed is not a part of the United States Government and our fiat currency might be printed by the BEP but is controlled by the Federal Reserve, a private institution.  so when Jeff says that the government prints our money he is correct but the decision to print it is not made by our government.  that's the only thing I disagree with.  virtually a non-issue in the scope of his comments. 


Jeff F.
« Last Edit: December 15, 2008, 07:42:25 PM by Jeff Fortson »
#nowhitebelt

John Kirk

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #85 on: December 15, 2008, 07:41:52 PM »
http://www.marketwatch.com/news/story/How-Madoff-cost-my-family/story.aspx?guid={8B073FA4-2052-485A-86FF-D4905E250DB9}

ROBERT POWELL
The Madoff scheme hits home
Commentary: Wife's job, entire 401(k) disappear along with a good cause
By Robert Powell, MarketWatch
Last update: 12:16 p.m. EST Dec. 15, 2008


BOSTON (MarketWatch) -- For much of my life, the name Bernie Madoff has meant nothing to me. Now, however, it means far more than it should in my household and countless others across America. In my household, the net effect of the Madoff scheme is that my wife has lost all the money in her 401(k) account and her job as well.

It's not only high-net-worth individuals who are affected by the Bernard Madoff scandal. Andrew Grumet, attorney at Schiff Hardin LLP, talks with MarketWatch's Kelsey Hubbard about the impact on charities. (Dec. 15)
But that's only part of the story. She worked at a private foundation that shut its doors last Friday, its assets -- all of which were "managed" by Madoff's firm -- frozen by court order.

The head of the Robert I. Lappin Charitable Foundation spent his hard-earned money on a cause that affected thousands of people who lived in the Jewish community north of Boston. And now, that cause -- in the absence of anyone or any group of people and organizations stepping up -- will become a memory instead of a legacy.

My personal story with Madoff begins this way. Some years ago, my wife signed up for a 401(k) at work. I didn't pay much attention to her retirement account until earlier this year, after the 2007 year-end performance numbers were reported. Her account was up, not significantly but more than other retirement accounts.

Curious, I tried to learn more about her employer's 401(k) plan provider, the Bernard L. Madoff Investment Securities LLC. Unfortunately, I found little information about the firm on its Web site, nor on the Securities and Exchange Commission and Financial Industry Regulatory Authority (FINRA) Web sites. So, I dropped the matter, failing to take note of what, in retrospect, was one of the red flags. Read more on what prosecutors say was Madoff's Ponzi scheme.

Like most 401(k) statements, it listed employee contributions, employer contributions, amount vested, percent increase over the previous period and total value. But what the statement didn't contain was any footer with the usual legal mumbo jumbo, no mention of SIPC insurance, or the broker-dealer through which securities are cleared, or anything that is normally found on 401(k) statements. Nor did the statement contain the names of any listed securities or mutual funds.

Fast forward to October of this year. Her 401(k) statement for the nine months ended September 2008 arrives and once again the account was up 6% or so -- it's hard to tell exactly. Now, I'm thinking that maybe her 401(k) plan provider is the Joe Kennedy of his time. He's the one guy who's making money in a down market, he's the guy on the other side of the trade. He's the next Bill Miller or Peter Lynch. In fact, my wife and I even discussed upping her contribution to her 401(k) plan given what's his name's success.

Then last Thursday evening I am with two other gentlemen -- a professor and money manager -- at a holiday party. The money manager asks whether we read the news about Madoff. No, I say, thinking the name Madoff rings a bell but I can't place it. The money manager relates the story. "Madoff," the professor asks. "Oh my God, I think my sister has her life savings with that guy," he says.

He borrows the money manager's phone to call his sister and returns ashen-faced. His sister has lost her life savings. The money manager and I offer the professor our condolences. I tell him about Securities Investor Protection Corporation and the possibility of his sister getting some of her money back. But really there are no words of comfort, except "there but for the grace of God go I."

I return home from the party and tell my wife about the "Madoff story," about the professor, about how sad he looked, about how terrible it all is on top of everything else.

Bob, she says, Madoff is the guy who runs our 401(k). Oh s*#t, I say. The connection is made. We begin to read the stories on the Wall Street Journal, on MarketWatch, on every media outlet and blog possible. Does this mean what I think it means, my wife asks. Yes, I say. You've lost everything in your 401(k). And then my wife asks the question about the elephant in the room. What if the foundation's money was with Madoff? My wife emails her boss to no avail.

After a sleepless night, Friday morning arrives. There's an email from my wife's boss with a timestamp of 5 a.m. My wife rushes to work. By 10 a.m., I get a tearful call. The entire staff has been laid off and all the foundation's programs have been terminated. Their money and a lot of other people's money is gone. And all because of this guy Madoff, who wasn't happy with enough.

In some small way, I feel better knowing that plenty of big-name investors got duped as well. I'm angry with myself for not questioning the statements and the performance more closely, for not asking my friends at the SEC or other experts to give things a once over. But even then, I'm not sure what good it would have done.

Plenty of people, more important than me, raised red flags to no avail.

With hope, my wife and I will survive this setback. We may or may not recover her 401(k) money. She may or may not land the same kind of job.

Oddly, that's almost irrelevant in the scheme of things. Thousands upon thousands of people put their trust in someone who didn't deserve that trust. And the collateral damage caused by that misplaced trust is not yet fully known and may never be fully known. Read about the lawsuits that are likely to ensue from the Madoff scheme.

"I hope he fries in hell," the professor writes in an email to me. And though Bernie Madoff has been a household name for a couple days now, so do I, so do I.

John Kirk

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #86 on: December 15, 2008, 07:45:03 PM »
My value system says this is one of worst crimes anyone can commit, perhaps just short of murder.

If he is found guilty, I'd like to see him in jail for the rest of his life.  It's so slimy and cruel, using power and influence to hang around in high society while sapping the riches of those around him.

50 billion dollars!

Richard Choi

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #87 on: December 15, 2008, 07:53:21 PM »
While I agree with your sentiments John, how many of us have joined private clubs to gain access to people like Madoff?

I am guessing quite a few number of people on this board have their money with people they have socialized with through their clubs.

John Kirk

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #88 on: December 15, 2008, 07:55:33 PM »
Yes, and perhaps 78% of them are underperforming index funds by an average of 2.6% per year!

Craig Sweet

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #89 on: December 15, 2008, 07:59:51 PM »
Lou Duran...you are so far wrong....but just keep believing that government IS the problem...go ahead.   I'll believe that human nature is toward greed and dishonesty and without government we get something very much like the last 30 years....every man for himself, and the rest, screw you!
No one is above the law. LOCK HIM UP!!!

Bill_McBride

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #90 on: December 15, 2008, 08:12:12 PM »
So where did all the $50B go?  Did he have $100B under management and the market is down 50%?  Is it real money or paper profits gone away?

rboyce

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #91 on: December 15, 2008, 08:20:22 PM »
good GCA thread. would read again. touched on lots of financial topics. only topics left are the importance of fat tails in fixed income aribtrage return distributions and Kelly betting vs. mean variance approaches to maximizing results.

Oh, or we could discuss an old article by the same guy who called CDS and the like, "weapons of mass financial destruction" years ago...

http://www4.gsb.columbia.edu/null/CIER?exclusive=filemgr.download&file_id=645551&showthumb=0

Cheers!

Lou_Duran

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #92 on: December 15, 2008, 08:51:57 PM »
jeffwarne,

Your post flew right over me.

But I can explain how to get the ball airborne; I can hit an 8-iron 150 yards if I really try; my son can most definitely hit the ball 300 yards, with a 3 metalwood;  I can ocassionally hit a driver 250; and I KNOW I could have been a much better golfer if I learned to play early in life instead of wasting my time playing baseball.  However, I would not bother more than I already have to try to convince Mr. Choi that the world works differently than he thinks.

Jeff Goldman,

Come on.  Certainly you can do better than that.  I know you think Richard "today we are all Keynesians" Nixon was a conservative Republican, but even he did not suggest that the business cycle had been eliminated.  What self-respecting supply-sider offered that straw man?  Please answer my questions.  When is government big enough for your tastes?  Add federal, state, and local, is one "public servant" per four or five private sector employees about right?  Or would you like the ratio to approach that of retired to active GM employees, all drawing benefits.

May I suggest that a technology revolution leading to large productivity increases and globalism might have a little to do with shallower recessions and quicker, longer recoveries?  Or do you believe that the billion or so people worldwide who've climbed out of abject poverty in the past decade have FDR and the much delayed vestiges of the New Deal to thank for their sudden good fortune.  Is Morganthau just full of s---- when he said that ND big government spending did nothing for unemployment other than to accumulate huge debts?  I know, hadn't it been for FDR's heroic and noble efforts, things would have gone to hell and we would all be calling each other comrade.  And if only we paid all public school teachers $100,000 a year our kids would all be getting perfect ACT and SAT scores and getting into Harvard.

As to your comparison of recent gasoline price declines to a tax cut and its ineffectiveness in jump starting the economy, was the huge price increases in 2007 and the first part of this year akin to a tax increase?  Many even on your side of the aisle suggested that the high gasoline oil prices was the straw that broke the camel's back forcing people to default on their mortgages and accelarating the housing meltdown.

Why is it then that your president-elect wants to raise taxes?  Anyways, wasn't it the folks on your side that claimed that the greedy oil companies and speculators not supply and demand were responsible for the astronomical high gas prices?  Have the bad actors suddendly grown a conscience?  Or is it just a short break for the Christmas/holiday season before the bastards jack them back up as one of my barber's clients opined while I was waiting for my turn? 

Craig Sweet,

I am not sure that it is an honor to be taken to the shed by someone like you, but I can take it.  I will turn the other cheek and wish you well.  Your sentiments reveal something about you which, if it was me, I would not be particularly proud of.  May I assume that we won't be playing golf any time soon?

Bill McBride,

The money apparently went to pay other investors a "return" on their money, for living expenses, country club memberships, and political contributions.  There was probably never the assets with values anywhere close to the artificial value of the fund.  The market collapse and the resulting redemption demands appears to have accelarated the day of reckoning.  It will be interesting to see if his sons who turned him in will come out of this mess unscathed.         

« Last Edit: December 15, 2008, 08:55:21 PM by Lou_Duran »

Norbert P

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #93 on: December 15, 2008, 10:07:48 PM »

"Why is it then that your president-elect wants to raise taxes?  Anyways, wasn't it the folks on your side ..."



Lou, are you an American resident/citizen?  (I really don't know) If so, why is the President-elect HIS and not yours?  Also, your attitude of "us and them" is exactly what our President-elect is trying to eliminate. In his words . . . "I need your help." 
   
« Last Edit: December 15, 2008, 10:10:55 PM by Slag Bandoon »
"Golf is only meant to be a small part of one’s life, centering around health, relaxation and having fun with friends/family." R"C"M

henrye

Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #94 on: December 15, 2008, 11:20:05 PM »
So where did all the $50B go?  Did he have $100B under management and the market is down 50%?  Is it real money or paper profits gone away?

Fees, comp for the firm's employees, rent and trading losses.  Sounds like he was trading options and not as a hedging mechanism.

Jeff Goldman

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #95 on: December 15, 2008, 11:46:59 PM »

Jeff Goldman,

Come on.  Certainly you can do better than that.  I know you think Richard "today we are all Keynesians" Nixon was a conservative Republican, but even he did not suggest that the business cycle had been eliminated.  What self-respecting supply-sider offered that straw man? 

Lou, as you know, the father of Supply-Side economics was Jude Wanniski (along, I suppose, with Arthur Laffer and the guy from the WSJ, and a couple other cranks).  Wanniski wrote:  "When economists talk about a business cycle, they have in mind a natural expansion and contraction of the national economy, not a "business." In that sense, I don't believe in the conventional "business cycle." But I do believe that individual industries expand and contract along cyclical paths. When we think of a business cycle, we normally imagine a sine curve, rising and falling. The national economy need not go through much of this if it is not being terribly mismanaged by government policy."

Nixon, of course, had nothing to do with supply-side economics.  In fact, one of the tenets of supply-side economics is a return to the gold standard.  Nixon got us off it.

"ND big government spending did nothing for unemployment other than to accumulate huge debts?"  Actually, the New Deal did not do enough.  Lot's of it was dumb--trying to push up prices artificially and restrict production, but what cured the depression was one of the biggest government programs in the history of the world --WWII.  Employment in the US went to zero in nothing flat.  However, until FDR listened to conservatives and raised taxes and cut spending in 37-38, the economy was slowly recovering.  It would have been much faster if the government had spent as much in 1933 as it did in 1942. 

"When is government big enough for your tastes?"  Beats me.  Clinton shrunk it pretty good, and Bush expanded it unnecessarily.  Now, it doesn't have to get bigger, it just has to spend a lot more, until we pull out of this, then it should shrink again, bigtime.

"May I suggest that a technology revolution leading to large productivity increases and globalism might have a little to do with shallower recessions and quicker, longer recoveries?"  Sure.  It looks like that's what caused the big productivity gains in the Clinton years, along with decent monetary and fiscal policy, but I don't know what that will have to do with curing this mess.

"was the huge price increases in 2007 and the first part of this year akin to a tax increase?"  Well, yeah, it decreased personal income, except we got nothing for it in terms of increased investment in long term assets like roads, bridges, etc.

"Why is it then that your president-elect wants to raise taxes?" I don't think he does anymore right now.  If he does, he's nuts.  The money supply has shrunk enough right now.  It would be equivalent to raising tariffs, cutting government spending, etc. etc.

 
« Last Edit: December 16, 2008, 11:04:13 AM by Jeff Goldman »
That was one hellacious beaver.

JWinick

  • Karma: +0/-0
Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #96 on: December 15, 2008, 11:50:20 PM »
My family lost money with Bernie Madoff.   My father called his office for two years before they let him invest.   His brother, while he grew up in Roslyn, couldn't get in.  It was a sign of status to invest with Bernie.

We'll be okay, but we know of many people that won't be.   I know 4-5 people that are wiped out.  One guy mortgaged his house to invest with Bernie. 

What upsets me is that one gang-banger kills another one and the perpetrator gets life in prison.  But, one man ruins thousands of families, and he'll probably get 5-10 years.  We need white-collar crimes to have serious consequences.   Why not 40 years for serious financial fraud????

Jeff Goldman

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Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #97 on: December 15, 2008, 11:52:44 PM »
messed up
That was one hellacious beaver.

Richard Choi

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Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #98 on: December 16, 2008, 12:00:04 AM »
Speaking of Arthur Laffer, aka Mr. Supply-side Economics and Trickle Down Theory...

http://www.youtube.com/watch?v=2I0QN-FYkpw

Is this guy EVER right??? Why is anyone still listening to this bozo?

This video is a text book case on why you should never trust so-called "experts" when it comes to stocks.

P.S. Laffer also weaseled out on the bet made on this video.
« Last Edit: December 16, 2008, 12:02:17 AM by Richard Choi »

JWinick

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Re: Bernie Madoff's $50 Billion Fraud thru country clubs
« Reply #99 on: December 16, 2008, 12:00:13 AM »
Here's what i've heard as far as golf clubs go -

80 members at St. Andrews
100 at Palm Beach Country Club
30 at Frenchman's Creek
1/2 of Seawane
Dozens at Fresh Meadows
10 families at Glen Oaks just resigned their memberships.

This is going to hit alot of Jewish clubs hard....