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Wednesday, October 21, 2009
WSJ’s Futterman gets it on Madoff’s Ponzi
Last year I concluded:
Before those millionaires start crying about how much they “lost”, ask them how much they actually earned through the years. If they were unlucky enough to reinvest their dividends into the same instrument, well, that’s another story.
But, billions of dollars simply don’t vanish. Madoff paid off in dividends. You have to include that in your calculations. The amount of money lost is actually equal to whatever it is that Madoff earned in compensation, and whatever he paid out to his employees and his other business costs. Whatever those costs are is tiny compared to whatever the newsmedia is reporting.
Unless Madoff embezzled as well. In that case, the money is not lost, but hidden. Unless he spent it, in which case it is lost.
If there is any news media reporting the issue as I am, please post links.
Finally, WSJ is reporting:
The filing showed that the Mets Limited Partnership, which is connected with Sterling Equities Inc., owner of the Mets, deposited about $523 million into two accounts with Mr. Madoff—and withdrew about $571 million.
This makes the partnership a “net winner” from the fraud and thus ineligible to receive compensation from the trustee, who is recovering assets for Madoff investors. Indeed, some of the gains could be subject to a legal claim by the trustee, who has said some net winners may have to pay back withdrawals they made in the six years before Mr. Madoff was arrested in December and charged with operating a large Ponzi scheme.
Glove-slap: Repoz.
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