Last week’s ABC mini-series chronicled Bernard Madoff’s $50 billion Ponzi scheme, which so devastated wealthy individuals and major institutions within the American Jewish community. I’m still taken aback by Madoff’s icy lack of communal conscience or apparent self-limitation. He wiped out Elie Wiesel’s life savings, and stole $15 million from Wiesel’s foundation. Madoff stole from Sandy Koufax. Madoff even defrauded Hadassah. Nobody does that. That’s like mugging your grandmother.
I wrote about the case yesterday at the Atlantic website. Not everything could fit in that piece. Here’s some additional observations.
There’s much to be said about his crimes–not least about the incompetence of the regulatory apparatus that failed to stop him despite repeated warnings and what researchers Greg Gregoriou and Francois Lhabitant quite properly called “a riot of red flags” over many years.
The biggest red flag was the simple knowledge that almost no investment reliably outperforms a simple index fund or can promise anything approaching the stock market’s overall returns without the market’s accompanying downside risks. Anyone who promises otherwise is likely deluding himself or trying to delude you….