Niiiice:


/could be what's called hotlinked
//Ya'll behave now

All cops go to public school, of course their math is poor.

The cops are the real criminals here. They have slandered the name of a decent man.

Nah, they prefer to eat their doughnuts - They leave the mathwork to this guy:



/ Apologies to cop farkers.

GoodasGold: The cops are the real criminals here. They have slandered the name of a decent man.

well yeah, they've done that tons of times. Don't see what it has to do with mr. ponzi scheme.

Well... they still all lost the entirety of their initial investments. This guy is a scumbag that will spent 5 years in Club Fed for lying and cheating people out of everything they had.

Rich arseholes will just write any losses off on their taxes. The little people will have to pay for this scheme.

It seems like this slimebag could be charged with extreme negligence, e.g. manslaughter, in the death of that French dude who killed himself because of being ruined.....

/watches Law & Order sometimes
//put Madoff in Rikers for about 5 minutes
///let him join a jooo gang for protection

MessyDwarf: Rich arseholes will just write any losses off on their taxes. The little people will have to pay for this scheme.

They must be protected from slander! Are you suggesting that they are not important enough to be protected? If you worked for a living maybe you'd understand why they need to be compensated. Who will invest in the victims now that everyone thinks they are bankrupt? You don't make enough money to work for it. That's why you don't understand...

Actually, I think the article is just reporting on charities. Nobody will invest in a charity that loses their money, so they need to publicly correct the error ASAP. But since they are probably charitable foundations set up by the families of rich people to pay their daughters or nephews as CEOs for life (and thereby keep all their money in the family instead of going to taxes or charitable causes), I am still not sure you should feel sympathy.

What's hilarious about Madoff is the only people who lost money were super-rich Jews and their Jew tax shelters.

NotWithoutAsswelts: What's hilarious about Madoff is the only people who lost money were super-rich Jews and their Jew tax shelters.

you know who else thought sad jews were hilarious...

MessyDwarf: Rich arseholes will just write any losses off on their taxes. The little people will have to pay for this scheme.

It is about time that the rich get back some of their money back. The little people pay so little in taxes anyway. They are just whining that they can't get more of the money from the rich people.

MessyDwarf: Rich arseholes will just write any losses off on their taxes. The little people will have to pay for this scheme.

The "rich assholes" have to pay taxes on their gains. Why should they have to pay taxes on their losses?

Besides, deductions are necessary for a even slightly fair tax system. My software company makes 90%+ profits on sales. There are many businesses that have less than 3 percent profit margins.

If they are not permitted to deduct expenses, what percentage tax would ensure that my companies tax burden was fair compared to theirs?

As for the capital - write offs, etc. Remember, these "rich assholes" have been paying taxes on nonexistent gains. Investment is a good thing - the money that they invest goes to fund businesses, which hire people (who pay taxes), sell goods (which are taxed), earn profits (which are taxed), and go back to the investors (where it's once again taxed).

If you remove the tax deductions for losses, you remove much of the incentive to invest. This _will_ increase movement of capital to overseas destinations, decreasing the tax base, it will decrease the taxes brought in (shifting even more of the burden towards the poor). It will also adversely affect small businesses, who already have a hard enough time raising capital.

Almost all manufacturing in this country is ran off the principle of "buy materials on credit, manufacture good, sell good and pay back credit". This is a good, healthy thing - it reduces barriers to entry. If it takes a million dollars out of pocket to start a retail business, then only the already wealthy can do so.

Also, it's incorrect that "the little people will have to pay for this scheme." There is less income - and as such, there is less income tax. The same thing happens in a recession.

Madoff didn't run a hedge fund, but other funds invested with him. He just spent the money paying other investors to keep the facade going.

So, if he never invested the money, there were no real gains. Those who invested with him didn't lose gains they lost their initial investment. They can have fun with the IRS getting the taxes paid on fake gains, that will be a future Farkline.

"While Madoff didn't run a hedge fund, his alleged crime may accelerate investor defections from the $1.5 trillion industry, already hit by its worst losses since at least 1990 and redemptions that may reach $400 billion this year, according to estimates by Morgan Stanley.

In a Ponzi scheme, returns to early investors are paid with money from later ones, until there isn't enough cash to go around. Madoff's alleged scam unraveled when he received $7 billion in redemption requests that he couldn't meet. " -Bloomberg (new window)

They are right, of course, in the same sense that all gains are essentially fictitious until you realize the gains by selling out of your investment.

But if you make that argument, then you must also concede that the entire concept of "market cap" is equally fictitious. This is because if everyone tried to sell their stock in a particular company at the same time, the value of that stock will instantly plummet. Only a tiny fraction of the original "market cap" can ever be realized, and the only investors to receive full value are the very few who sell first.

Once you understand this, you may begin to wonder how the stock market differs from a Ponzi scheme.

"The point is, ladies and gentleman, that greed -- for lack of a better word -- is good.

"Greed is right.

"Greed works.

"Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

"Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind.

And greed -- you mark my words, will...save that other malfunctioning corporation called the USA."

cyt0plas:

Thanks for that reminder of how it works.

That said, it will be interesting to see how the prosecutions go down. This country seems to be very soft on white collar crime.

MessyDwarf: Rich arseholes will just write any losses off on their taxes. The little people will have to pay for this scheme.

my sister lost her pension. it turns out her town invested the pension money with Madoff. She is not, nor was she ever, by any means, rich.

MorningBreath: MessyDwarf: Rich arseholes will just write any losses off on their taxes. The little people will have to pay for this scheme.

my sister lost her pension. it turns out her town invested the pension money with Madoff. She is not, nor was she ever, by any means, rich.

How does that work? Isn't a pension a contractual obligation by the providing entity to provide X dollars a year for the recipient? If she works for a town (and presumably the town didn't declare bankruptcy and liquidate its assets), don't they still have to provide her pension funds? Now a 401K would be a different story, since that's an investment vehicle.

MorningBreath: my sister lost her pension. it turns out her town invested the pension money with Madoff. She is not, nor was she ever, by any means, rich.



Swindler's List: Baltimore police and fire employees lost about $3.5 million in pension money invested in a fund with ties to disgraced money manager Bernard L. Madoff. (new window)

Looks like the only people that made money off the scamster were the Democrats he contributed to.

No farking kidding, intrepid reporters. That's because the money in your initial reports was based on the made-up numbers coming from Madoff himself. You know, the guy who admitted to making up the numbers? That one. The only money lost was the actual dollars people gave to the guy to invest.

If I give someone $10 to buy lottery tickets for me and he calls me and says, "hey, one of those tickets I bought for you was a $10 million winner" and when I show up to collect it he says, "Psych! I was just kidding, none of them won", I didn't lose $10 million, I just lost $10.

Harvey Manfrenjensenjen: No farking kidding, intrepid reporters. That's because the money in your initial reports was based on the made-up numbers coming from Madoff himself. You know, the guy who admitted to making up the numbers? That one. The only money lost was the actual dollars people gave to the guy to invest.

If I give someone $10 to buy lottery tickets for me and he calls me and says, "hey, one of those tickets I bought for you was a $10 million winner" and when I show up to collect it he says, "Psych! I was just kidding, none of them won", I didn't lose $10 million, I just lost $10.

Well, not entirely true.

If you had $100,000 invested with Madoff for 20 years, like some people did, it is surely not right to say that you only lost $100,000.

Because our inflationary economic system means that money has to be invested somewhere just to retain its value, and so 20 years of missing interest is itself a huge loss.

$100,000 in 1989 dollars is probably $250,000 today.

BeowulfSmith: MorningBreath: MessyDwarf: Rich arseholes will just write any losses off on their taxes. The little people will have to pay for this scheme.

my sister lost her pension. it turns out her town invested the pension money with Madoff. She is not, nor was she ever, by any means, rich.

How does that work? Isn't a pension a contractual obligation by the providing entity to provide X dollars a year for the recipient? If she works for a town (and presumably the town didn't declare bankruptcy and liquidate its assets), don't they still have to provide her pension funds? Now a 401K would be a different story, since that's an investment vehicle.

I don't know how her pension fund is set up, I don't think the money is guaranteed though. If the money is truly lost, I would be weighing my options whether to sue or not. I can't believe the town played so fast and loose with its investments.

$100,000 in 1989 dollars is probably $250,000 today.

Pretty damn close. 100k over 20 years with a 5% rate of return would be 265k

submitter: Madoff victims say their losses aren't as big as initially reported. In related news, the cops who assess pot busts and the cops who assess financial crimes all use the same math

It sounds like the organizations were initially reporting losses for the amount shown on their Madoff statements, which of course was totally made-up. But they're currently just reporting the initial investment, which is low-balling it. A better way would be to take the initial investment and calculate the current value if they had used some standard investment, like U.S. treasury bonds, the whole time

trollus_and_cressida: $100,000 in 1989 dollars is probably $250,000 today.

Pretty damn close. 100k over 20 years with a 5% rate of return would be 265k

So you're saying a five percent return has barely kept up with inflation?

/You ain't seen nothing yet.
//Damn bailouts.

2chris2: Harvey Manfrenjensenjen: No farking kidding, intrepid reporters. That's because the money in your initial reports was based on the made-up numbers coming from Madoff himself. You know, the guy who admitted to making up the numbers? That one. The only money lost was the actual dollars people gave to the guy to invest.

If I give someone $10 to buy lottery tickets for me and he calls me and says, "hey, one of those tickets I bought for you was a $10 million winner" and when I show up to collect it he says, "Psych! I was just kidding, none of them won", I didn't lose $10 million, I just lost $10.

Well, not entirely true.

If you had $100,000 invested with Madoff for 20 years, like some people did, it is surely not right to say that you only lost $100,000.

Because our inflationary economic system means that money has to be invested somewhere just to retain its value, and so 20 years of missing interest is itself a huge loss.

$100,000 in 1989 dollars is probably $250,000 today.

If the money was never there, it was never lost. It "existed" only on the phony reports. If it existed in something that had market value, such as a stock, then it would have been lost.

Also, opportunity cost is not the same as a loss. If I stick $100,000 under my mattress for 20 years I haven't "lost" interest, I just failed to earn any. If my bed caught fire, I wouldn't have "lost" $100,000+interest, I would have only lost $100,000.

Also, opportunity cost is not the same as a loss. If I stick $100,000 under my mattress for 20 years I haven't "lost" interest, I just failed to earn any. If my bed caught fire, I wouldn't have "lost" $100,000+interest, I would have only lost $100,000.

HUH? That is the concept of opportunity cost. It is the loss you incured from a particular action or inaction. If you could earn a 5% return from a risk-less asset then if you do nothing with your money then your opportunity cost is 5%.

Yes the principal investment you make is much less than your principal investment + the opporunity cost but thats the point your finance professor is trying to make. Time value of money. Those that understand it will do better than those that dont.