this post was submitted on 01 Dec 2023
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politics

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[–] [email protected] 6 points 11 months ago (2 children)

Exactly. It's like Bernie Madoff. Bernie was doing the same thing as everyone else in 2008, but his clients were all rich folks. He went to jail. The hilarious thing is that Donald Trump was interviewed about Bernie and even Donnie had to admit that it was mostly victimless, because everyone Madoff had stolen from could afford the loses.

[–] [email protected] 10 points 11 months ago (1 children)

Bernie is an interesting case. As part of his guilty plea, he admitted that from around 1990 onward, basically every transaction in his company was fraudulent. The actual start was probably at the beginning of his company in the '70s.

What makes that interesting is that his clients weren't just rich, but experienced. They knew how to smell out a con. He was able to keep his claims just plausible enough that they didn't notice for decades.

A lot of Ponzi schemes will claim 300% or 5000% percent returns in a year. Experienced investors know that's bullshit; maybe you can get lucky in one or two trades, but it's never sustainable. The SP500 will tend to give you returns of 8% or so in the long run (with plenty of year to year variation), and it's hard to beat that while accounting for transaction costs. Bernie was claiming 15-20%, which is good, but not crazy.

[–] [email protected] 7 points 11 months ago

imho, they all knew it was a scam, but they all figured that they were the insiders and only the rubes were getting fleeced.

[–] [email protected] 10 points 11 months ago (1 children)

Bernie was doing the same thing as everyone else in 2008, but his clients were all rich folks.

CITATION NEEDED

Lots of companies were using legal but sketchy as hell financial instruments and over inflating safety on investments where lots of people lost lots of money. Bernie was different. He was creating fraudulent statements saying you had money in your account with him for years and only paying out with what other new investors put in; classic Ponzi scheme.

What other large Ponzi schemes at the time are you saying were occurring?

[–] [email protected] 5 points 11 months ago (2 children)

What other large Ponzi schemes at the time are you saying were occurring?

You're kidding, right?

https://en.wikipedia.org/wiki/2007%E2%80%932008_financial_crisis

Of course, these weren't schemes or a rip off because it was 'legal.'

[–] [email protected] 7 points 11 months ago

Yes. That's a fundamentally different situation than a ponzi scheme

[–] [email protected] 4 points 11 months ago (1 children)

Of course, these weren’t schemes or a rip off because it was ‘legal.’

Now you've got it. One was unethical but legal (most of the housing crisis), Madoff was breaking established written law. Only Madoff was the Ponzi scheme.

[–] [email protected] 1 points 11 months ago (1 children)

You should learn to recognize sarcasm.

[–] [email protected] 4 points 11 months ago (1 children)

I could have done that and called into question your naive understanding of financial transactions. However, I wanted to keep from insulting you, but it looks like you've removed that opportunity.

[–] [email protected] 0 points 11 months ago