Bernie Madoff Media BS

This Madoff stuff is so out of hand in the media. The guy committed a crime and should be punished, but nobody seems to want to look at the real facts.

If you give me $2 to invest, and I say I put it on the horse “Stupid Sucker” in the 5th at Belmont and I tell you it came in at 50 to 1 paying $102, in a nonexistent race, and then I take off with your money….did I steal $102? No, I stole $2.

Records seem to indicate that the funds invested in Madoff were somewhere around 10 -17 Billion. They have currently located roughly 1 billion in assets. That means the investors have lost between 90 – 94% of their investment at this point. If / when they find more assets, that percentage loss will drop.

If these investors had invested in the S&P 500, they would have still had a huge percentage loss in net worth. Depending on the clients funding date it would be hard to determine an exact percentage, but from the S&P’s peak in 2000 to present there has been a 65% drop. The S&P lost 2/3 legally of what Madoff lost illegally. When you look at the spread between the two, the damage Madoff did is substantially less than it is being presented at roughly 65 billion. We are talking about an excess loss of about 3-4 billion dollars over market averages. If they recover more assets, these losses are actually going to get closer to matching market averages.

The guy committed a crime (or at least confessed to committing one at this point) and should go to jail, and I feel no sympathy for him, but we should be evaluating this situation based on the FACTS concerning actual damages and not on EMOTION. Our legal system was designed that way for a reason!

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