Bernie Madoff On His Ponzi Scheme

Bernie in his own words:

“I wasn’t going to hurt anybody,” Madoff, 78, told an interviewer about the fraud that lasted at least 16 years…

The fraudster ended up scamming nearly 5,000 clients of $65 billion, including fabricated gains.

“It was a temporary thing and, because of the success that I’ve had and the money I’ve made for people, I sort of felt it was just,” Madoff told Eugene Soltes, an associate professor at Harvard Business School, who released a clip from a series of phone interviews with the jailed Ponzi schemer.

In short, Bernie had a lot of dopamine from success, and this eroded his morals and addicted him to free resources, making it all fine.

I’ve watched a few accounts now of ponzi schemes, as they unfolded. What is most striking is that the individuals often know they are going down. They realize they are in trouble long before anyone even realizes their investment is a scam. Usually they will have millions of dollars under their control. And yet, they almost always hang in there until the very end, even though they could easily pack up all their client’s money and flee to some safe haven without extradition.

Given that their initial theft shows they have no morals, their failure to plan ahead, or acknowledge the threat of their actions, has always struck me as incredibly r. Of course the key element linking all Ponzi schemes is the sudden influx of free resources.

Not only that, but when their homes are raided, you often find they have compulsively squandered most of the cash on the stupidest things:

With so many Ponzis and so little time to know if you’ve been hoodwinked, there are some red flags even the most trusting investors can bank on: yachts, mansions, jets and women. If your investment adviser is dabbling in any of the above, there’s a good chance you’ve been Ponzi-ed or are about to be…

The charge alleges Walsh and Greenwood gave themselves $8.2 million in employee “advances” and another whopping $160 million for personal expenses. The complaint detailed funds’ being used for buying rare books at auction, purchasing expensive horses, laying down $80,000 for a Steiff teddy bear and providing the ex–Mrs. Walsh with a $3 million residence…

When the CFTC’s acting director of enforcement, Stephen Obie, was asked what the most outrageous use of investor money he’s come across has been, his list was appropriately wacky. “The craziest things we’ve found recently,” Obie said, “are a bust of Julius Caesar, an extensive garden-gnome collection, a $300,000 Mickey Mouse drawing, bejeweled ink pens, several of which cost more than $100,000, $4 million worth of custom tailored clothes, a silver set allegedly belonging to Paul Revere, and two purple Jaguars with hand-painted leopard-skin roofs.” It should be added that Ruth Madoff once gave her husband a $14,000 cigar humidor.

But you know you’ve really been Ponzi-ed when your investment guru has his own Caribbean island, a $10 million moated castle in Miami, a $100 million fleet of private jets and three or four “outside wives” along with his real one — and calls himself “Sir” despite never having been officially knighted.

Of course, the above describes the lavish world of financer R. Allen Stanford, a near Madoff who, according to the SEC, allegedly pulled off a 15-year Ponzi based on suckering investors with $8 billion or more of so-called high-yield certificates of deposit.

The guy with the garden gnomes not only bought hundreds of gnomes, he bought hundreds of bejeweled Mont Blanc pens, ornate gold animal sculptures laden with jewels, and all sorts of other trivialities. Clearly he was addicted to the acquisition of essentially free stuff, to the point he would go out and buy any kind of junk for all sorts of exorbitant prices, just to get that fix. By that point, you could see how trusting him with money was no different that entrusting your life savings to a heroin addict.

Once you see r/K you will begin to see it manifesting everywhere. Of course up until Trump, you could see the detriments of r most clearly in what was happening to our economic system, which was not much different from what these guys and their Ponzi schemes are doing.

r/K is a dopamine fix if you hate liberals, because liberals hate the idea