Tis true in many circles. MANY circles.
Madoff succeeded.
No, he did not succeed in investing money the right way, the billions entrusted to him by hopeful investors everywhere. He did not succeed by being above the law and getting away with it. Yet he succeeded wildly in confirming many peoples' opinions about money managers: We're all crooks. The entire lot of us.
I was debating a close colleague the other day and he has seen the horrors of war (did a tour in Iraq and Afghanistan) and he usually has very well-researched, well-documented opinions on topics ranging from Greek civilization to power in current-day Middle East. He told me Madoff fascinated him. I asked him why. He (We will call him Davis) told me it was kind of like when he played his Uncle in chess one time. His Uncle check-mated him in two moves, but then would not play him ever again...He surely knew Davis would beat him and was a better player so he wanted to beat him once and then never play him again.
In essence, Davis relayed to me, Madoff did the same thing with regards to his competitors in the money management game. Davis told me that Madoff, well-versed in the investing world, knew there was not an investing panacea out there so he made up a fictitious 'world' that investors placed money in, and he 'procured' a track record, conservative with regards to yields so as not to arouse to much suspicion, but consistently profitable.
Davis claimed that EVERYTHING is a racket, a mere illusion---including the investing world.
I was not witty enough as it was bordering on 2:30 am when I got into this debate with Davis so I failed to bring up George Soros, the Quantum Fund Money Manager, who earned his clients 30%/year for over 2 decades, and becoming one of the wealthiest men in America within a relatively short time. Soros was an exemplar of the best performer, and there are others. Commodity Trading Advisors, hedge fund managers (not all of them lost money in 2008; some made out like bandits by betting on the crash), etc.
It's like sports...There are bench players, role players, stars, and superstars. And the roles oscillate oftentimes many times within one's career.
It disheartened me to think that a fellow American would disregard an entire line of work and lend credence to a greedy simpleton for creating a behemoth Ponzi scheme that defrauded investors of billions. It's really as simple as that. Al Pacino's character in Christopher Nolan's "Insomnia" states to the criminal psychopath, Robin Williams, when Williams goes on about how he himself as a beguiling, heartless criminal must fascinate the visibly haggard cop: "You're about as interesting to me as a blocked toilet is to a plumber." This is exactly how we should feel about Bernie Madoff. No Freudian psychoanalysis, no leather couch, no Proust or even Dr. Phil. This guy was just greedy. No more, no less.
An institution like money management has its fair share of charlatans because it is a direct conduit to and deals directly with that which some humans cannot behave normally: MONEY.
The only question I must ask of this colossal and abysmal failure of a man is "How much is enough?" How many houses can you have, how many country clubs can you play at, how much can you eat, how big can your bed be? It's almost unreal the amount of money earned on $50 billion year after year after year. It's tragic that people have to try to take short-cuts and not try to find the better way, and make mistakes and fall on one's face, and get back up again, and try again.
Didn't Edison fail like 1000 times before the light bulb actually worked? What ever happened to guys like him? Are our heroes now those with zeroes at the ends of their bank accounts, irrespective of how they earned them? What kind of a society puts up with a man like Madoff, with a regulatory body that seemingly looked the other way for YEARS, with myriad parties probably in cahoots with him, and with a wife who scrambles to grab up at least $15 million of the 'dirty money' for herself the days surrounding his arrest, and with a justice system that will probably put him away in a minimum-security prison for the remainder of his natural life?
What kind of America have we become?
People are killing themselves because of this man. Yes, Davis states, these investors perhaps were greedy by placing all their risk capital with a feeder fund or with his hedge fund. But is it their fault? Perhaps in part. Do they deserve what they got? Undeniably not.
Madoff is the man who wanted to take the easy way out. He took short-cuts and it caught up with him. He was already wealthy from his days as a Nasdaq Chair. He certainly didn't need the money nor would he have problems raising money from the luminaries of Hollywood, non-profit, feeder funds, etc. His pedigree spoke volumes.
Other avenues he could have taken:
1) Learn to trade.
2) Hire some quants who could trade.
3) Hire floor traders/CTAs/other money managers who could trade.
4) Get into a completely different business/side of the business altogether
I would think starting a Ponzi scheme would have been like Possibility Number 324 on the list...even for someone who has shady tendencies. Perhaps, as Davis intimated, the money management industry cannot be beat, that no one can beat the markets consistently. But what of Soros or guys like Dighton WorldWide Investments or Turtle Traders like Richard Dennis or solid Trend Followers like John Henry? Or is that just too much research for a guy like Madoff to do?
I run a Commodity brokerage and a Commodity Trading Advisor so I know how it feels to be on the inside and try to trade well and trade consistently. I have made some brilliant moves and even some ugly mistakes, but I do it with integrity and with utmost humility and I learn and I keep getting better each day...as we all should try to do. THAT is the American way. This business of starting a RACKET is beyond my comprehension, but I will not ascribe some brilliant attributes or an amazingly prescient mind in Madoff as he deconstructed the money management realm and decided it was a bunch of malarkey and he's gonna play ball not the right way, but his way.
Hedge funds are largely unregulated pools of capital. It is not like a CTA (Commodity Trading Advisor) or a mutual fund where the investments/trades are exchange-traded derivatives/shares. The speculative plays are often OTC (over-the-counter) derivatives and can literally be a speculative play on anything and in any market, black market or otherwise. It really is unreal how unregulated this game has become, but like with any game, there are the guys who play within the rules and guys like Madoff who are so egregious that they would make an intelligent person like my buddy, Davis (whom I still respect wholeheartedly, but simply bringing him up to help illustrate a point), think that the entire money management industry is a racket.
So wrong he would be, though. And when people go to the funerals of those who have offed themselves, they will probably feel very sick to their stomachs as they may be very well thinking the exact same thing. And in that way Madoff has succeeded.
Sunday, February 15, 2009
Tuesday, February 3, 2009
Since I Have Been Obsessed With Death Lately...
I don't know if it's been for the last few years or what...but as far back as my college graduation, I have had a strange obsession with death.
No, I don't wear black everyday and all day, in mourning for my fellow man. (Actually, 'all-raven duds' is a common garb choice for many Portlanders, of which I must admit I am not a member.) I am not some atheist philosopher who rants and raves about the depravity of the world who is never jocular and who never smiles. I don't live in negative, pessimistic thought and speech, verbally seeking to douse joy or optimism of my fellow human being with back-handed remarks like: "What does it matter? We're all gonna die anyway."
Okay so I am not THAT obsessed with death.
BUT I must admit there was a phase in my life where I liked those Cold Case files shows and the like and would watch those every night after work like a strange seance was going on at my place. I think for at least six months to a year I was hooked. This was after my college days, say around 2002ish, I believe. The narrator's voice on the most eerily haunting show was (and still is) so mortifying, which only served to enhance the visceral experience of the harrowing, grisly murders constantly portrayed on that show. I remember the guy who played MLK on tv (the audience never sees his face, but I recognized his distinct voice), Paul something, narrated the City Confidential show on A+E.
The show always started out by showing us a town, Philly, or Minneapolis, and a lot of times, smallish New England hamlets or other small towns where murder would not seem to be lurking in every dark corner. Like in Michael Moore's films, he would start out by entertaining us and letting our audience settle in as he narrated the beauty of the city's skyline, or the huge bookstore that is frequented by tourists from all over. The images were pleasant early on in the show, and usually the lead-in to the show's 'drama' usually consisted of him referring to the town as a "quiet bucolic town." He loved that word 'bucolic.' I don't think he used many synonyms for variety's sake on the shows. 'Bucolic' was his word and he was sticking to it. Anyways, I remember the show always had him saying something like: "No one knew that this sleepy, bucolic town would be the setting for deceit, treachery, and MURDER!" Then the drumbeats kick in resonantly, and we cut to a commercial. Then when we come back to the show, we meet the participants and we play out the narrative up until and including the murder he discusses on this episode. I remember liking the structure of the show, like I was appreciative of the entertainment value the show provided.
I remember my friend and I joking that he always seemed 'on the sauce' or drunk when he narrated that show, and we would repeat his refrain of "No one knew...deceit, and treachery, and MURDER!" when we wanted to make each other laugh. We even saw the humor in how he seemed to revel in saying the word "MURDER," seemingly sensationalizing it at least verbally, and certainly seeking to keep us glued on to this show til after the commercial break. I always liked that show.
I also liked finding out about how Lumenol shows cleaned-up blood stains and Dr. Henry Wang who was like this wizard of finding murderers, and I always thought they ought to make a movie of him. I think Dr. Henry Wang was on Cold Case files. He was like the MacGyver of murders; when all hope is gone, bring this guy in and he'll save the day. Real story, too, not a fictional character which I enjoyed.
Now I don't watch tv much, but like myriad folks out there, I use the internet frequently. If I see a headline that has to do with death, I dig and pry and seek to find out who the person was, what the circumstances were, and the most salient item I search for: AGE OF PERSON'S DEATH. I feel so pathetic sometimes, like I have to check myself sometimes. I might think for a split second: "Oh, he was 68, so he lived a full life. He ended up with a bullet in his head, but he lived a long life so that's not as tragic as it happening to a 16-year-old." Stuff like that. But I must readily admit that seeing Caylee Anthony or even Jeremy Lusk (another blogging day, indeed) or countless numbers of young people who die everyday, it really gets to my core.
And then, how do I feel? I feel better in some ways. Even if I am having a rough day for whatever reason or if I am in a rough time in my life, or am not totally happy for some reason, I feel grateful to be alive. I feel grateful to be healthy. I feel grateful to be able to enjoy the world for at least another moment, and hopefully another day. But I still suspect that this wears on me perhaps psychologically as well...I may start to get very jaundiced about life and about humanity. (Indeed, I am a 'hopeful agnostic,' meaning I hope there is a God, but I feel that perhaps we will never know and that God could indeed be unknowable unless we invent him to try to find meaning in our lives---Another blogging day still.)
Indeed, I probably (maybe not) think about stuff like this more than most...I have ADHD so my mind races constantly about random thoughts and my mind jumps these thoughts and subjects more often than rabbits hump. Still, I cannot help but wonder that if I had a family, wife and kids, would I think about these questions as much? Would I think about them MORE since now I have others to look out for and protect?
Don't want to write pages and pages on this stuff though I could. But yes, I am obsessed with death, I think, and I am not sure how it has affected me or if it is normal, or if my moribund musing is a trait/phase that ought to be nipped in the bud unless I wish to have more shrink sessions than Woody Allen right after adoption day.
I will head off now, and yes, if I see another headline that goes over deaths, I will look for the 'age of person's death' and will lately try to find video of the person alive and really look into his/her eyes and think: 'This person was alive just yesterday.' Haunting, I know, but at least I can admit it and I am pretty sure I am not the only one.
No, I don't wear black everyday and all day, in mourning for my fellow man. (Actually, 'all-raven duds' is a common garb choice for many Portlanders, of which I must admit I am not a member.) I am not some atheist philosopher who rants and raves about the depravity of the world who is never jocular and who never smiles. I don't live in negative, pessimistic thought and speech, verbally seeking to douse joy or optimism of my fellow human being with back-handed remarks like: "What does it matter? We're all gonna die anyway."
Okay so I am not THAT obsessed with death.
BUT I must admit there was a phase in my life where I liked those Cold Case files shows and the like and would watch those every night after work like a strange seance was going on at my place. I think for at least six months to a year I was hooked. This was after my college days, say around 2002ish, I believe. The narrator's voice on the most eerily haunting show was (and still is) so mortifying, which only served to enhance the visceral experience of the harrowing, grisly murders constantly portrayed on that show. I remember the guy who played MLK on tv (the audience never sees his face, but I recognized his distinct voice), Paul something, narrated the City Confidential show on A+E.
The show always started out by showing us a town, Philly, or Minneapolis, and a lot of times, smallish New England hamlets or other small towns where murder would not seem to be lurking in every dark corner. Like in Michael Moore's films, he would start out by entertaining us and letting our audience settle in as he narrated the beauty of the city's skyline, or the huge bookstore that is frequented by tourists from all over. The images were pleasant early on in the show, and usually the lead-in to the show's 'drama' usually consisted of him referring to the town as a "quiet bucolic town." He loved that word 'bucolic.' I don't think he used many synonyms for variety's sake on the shows. 'Bucolic' was his word and he was sticking to it. Anyways, I remember the show always had him saying something like: "No one knew that this sleepy, bucolic town would be the setting for deceit, treachery, and MURDER!" Then the drumbeats kick in resonantly, and we cut to a commercial. Then when we come back to the show, we meet the participants and we play out the narrative up until and including the murder he discusses on this episode. I remember liking the structure of the show, like I was appreciative of the entertainment value the show provided.
I remember my friend and I joking that he always seemed 'on the sauce' or drunk when he narrated that show, and we would repeat his refrain of "No one knew...deceit, and treachery, and MURDER!" when we wanted to make each other laugh. We even saw the humor in how he seemed to revel in saying the word "MURDER," seemingly sensationalizing it at least verbally, and certainly seeking to keep us glued on to this show til after the commercial break. I always liked that show.
I also liked finding out about how Lumenol shows cleaned-up blood stains and Dr. Henry Wang who was like this wizard of finding murderers, and I always thought they ought to make a movie of him. I think Dr. Henry Wang was on Cold Case files. He was like the MacGyver of murders; when all hope is gone, bring this guy in and he'll save the day. Real story, too, not a fictional character which I enjoyed.
Now I don't watch tv much, but like myriad folks out there, I use the internet frequently. If I see a headline that has to do with death, I dig and pry and seek to find out who the person was, what the circumstances were, and the most salient item I search for: AGE OF PERSON'S DEATH. I feel so pathetic sometimes, like I have to check myself sometimes. I might think for a split second: "Oh, he was 68, so he lived a full life. He ended up with a bullet in his head, but he lived a long life so that's not as tragic as it happening to a 16-year-old." Stuff like that. But I must readily admit that seeing Caylee Anthony or even Jeremy Lusk (another blogging day, indeed) or countless numbers of young people who die everyday, it really gets to my core.
And then, how do I feel? I feel better in some ways. Even if I am having a rough day for whatever reason or if I am in a rough time in my life, or am not totally happy for some reason, I feel grateful to be alive. I feel grateful to be healthy. I feel grateful to be able to enjoy the world for at least another moment, and hopefully another day. But I still suspect that this wears on me perhaps psychologically as well...I may start to get very jaundiced about life and about humanity. (Indeed, I am a 'hopeful agnostic,' meaning I hope there is a God, but I feel that perhaps we will never know and that God could indeed be unknowable unless we invent him to try to find meaning in our lives---Another blogging day still.)
Indeed, I probably (maybe not) think about stuff like this more than most...I have ADHD so my mind races constantly about random thoughts and my mind jumps these thoughts and subjects more often than rabbits hump. Still, I cannot help but wonder that if I had a family, wife and kids, would I think about these questions as much? Would I think about them MORE since now I have others to look out for and protect?
Don't want to write pages and pages on this stuff though I could. But yes, I am obsessed with death, I think, and I am not sure how it has affected me or if it is normal, or if my moribund musing is a trait/phase that ought to be nipped in the bud unless I wish to have more shrink sessions than Woody Allen right after adoption day.
I will head off now, and yes, if I see another headline that goes over deaths, I will look for the 'age of person's death' and will lately try to find video of the person alive and really look into his/her eyes and think: 'This person was alive just yesterday.' Haunting, I know, but at least I can admit it and I am pretty sure I am not the only one.
Subscribe to:
Posts (Atom)
