littleflower wrote:
I watched the Madoff exposé again the other day and the lack of response even after he was exposed remains stunning.
gyre ... it isn't so easy to regulate in a way that prevents people like madoff without harming everyone else ... and thieves are thieves. laws and regulations do not prevent them from stealing. never have, never will.
i know some investment professionals. they do not know what is going to happen ... there are too many different factors, and too many opinions on what all of the data means. they have their favorite experts, but nobody worth taking seriously "knows" what will happen, they are simply weighing factors and comparing them to historical models. in the end, some will be right and some will be wrong. but, at this point, nobody knows. and to think otherwise is just silly... there are too many things that *could* happen that have not been figured into things.
and why on earth would you trust a bunch of politicians to regulate anything anyhow? they need to be regulated themselves.
Madoff was not a symptom of the massive real estate fraud perpetrated by the banking industry, just of the lack of due diligence.
Everything Madoff did was illegal and still regulated.
He was exposed to the sec more than once and they still didn't catch him!!
They shouldn't have needed whistleblowers, but that wasn't enough.
http://www.pbs.org/wgbh/pages/frontline/madoff/view/
The rest of the economic collapse is a different issue and even more shameful.
Looking at the post mortems makes it clear that anyone with knowledge of how mortgages were being made and packaged, knew it was a house of cards.
Not every investment adviser should have been aware of this, but enough of them should have been with the money involved.
I don't know if the people I am referring to were unusually prescient or just did due diligence, but they were right and for the reasons they gave too.
They made a big effort to warn many of us, starting years ago.
But a bad result was inevitable and the problem is not fixed and will be much worse next time.
My financial background amounts to common sense and maybe a semester of financial american history.
De-regulation was easy to read.
Last time we operated without the regulations reagan removed, the world economy collapsed due to fraud.
Simple.
It isn't close to being fixed.
Some issues are much more subtle.
A four year old with the right knowledge could have read the real estate/banking problem.
That may not be true next time and things will be beyond hope when the walls go down.
How many ghost investments are still on the books?
How well do you understand derivatives?