Bernard Madoff Affair – Latest Bernard Madoff Affair news – Medal that marked hanging of ’19th century Madoff’ up for grabs …
Ok so 3 more posts today that I’ve dug up – I’m an information JUNKIE on this stuff lately. Give em a browse and let me know what ya reckon. They’re just from a few different sites I’ve been surfing lately that are generally good for information like this…
Medal that marked hanging of ’19th century Madoff’ up for grabs …
New York, Aug.14 (ANI): The chief financial officer of the Hadassah, a Jewish volunteer organization, is said to have had a rip roaring affair with New York Ponzi King Bernard L. Madoff in the late 1990s, which in turn helped him to …
Wednesday-Night – » The Madoff affair
(Reuters) – Epic swindler Bernard Madoff's two sons, his brother and a niece will be sued this week for $198 million, the trustee winding down the Madoff firm told CBS News' “60 Minutes” broadcast on Sunday. New York lawyers Picard and …
I’m Bernard Madoff–I’m Telling All. Right Here. Trust Me.: Madoff …
Madoff Affair Becomes A Family Affair. To: Irv Picard, Esq. From: Rich Zabel, Esq. Chief of Criminal Division U.S. Attorney's Office Southern District of New York Winner:US Attorney's Award For Distinguished Service Dear Irv: …
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The scandal around the so called investment guru Madoff is the second big case in this year as masses of people have lost their fortune. The first case was the bankruptcy of Lehman Brothers. Many people are lured to invest their money in financial market instruments that promise attractive yields. These instruments are, however, as opaque as black boxes.
Hedge funds as black holes
Hedge funds bet with complex structures of derivatives. Most of them lack the transparency. The common investors do not understand how they work. Institutional investors usually invest in funds of hedge funds. Their managers claim to be capable of picking the promising funds. Funds of funds absorb a cascade of fees that have to be subtracted from the yield. There is a wide variety of investment styles among the hedge funds. It seems that the general lack of transparency of the hedge funds industry has made it possible that the Madoff Ponzi could remain undetected for such a long time. The Madoff scandal demonstrates also a failure of the SEC as well as of the involved audit firms.
Hedge funds should correlate with other asset classes, e.g. stocks or bonds, according to the theory. The fact is: Hedge funds have badly performed during the actual financial crisis. The global hedge-fund industry lost $64 billion of assets in November 2008 says Bloomberg.
Structured products as another black hole
Masses of people have lost their savings with structured products that have been issued by the bankrupt Lehman Brothers. I have talked to people who have been badly advised to invest their money in a Lehman Brothers product. They were persuaded to invest in products that they did not really understand. Structured products are a combination of a traditional investment (e.g. shares, bonds, foreign currency, commodities) and a derivative financial instrument. There are several types of structured products. The most popular ones are those that promise full or partial protection of the capital. The people trust the word “capital protection” on the label, but they forget the issuer as a risk factor. Lehman Brother was an issuer that went bankrupt and thus was not able to fulfill its obligation.
Keep It Smart and Simple
What is the lesson learned from Lehman Brother bankruptcy and the Madoff scandal? Structured products and hedge funds are complex and difficult to understand. They can behave like black holes and absorb the investors’ fortune. Even professional and institutional investors did or could not look it through in the case of the Madoff scandal.
The best way to protect the money is to invest in assets that are transparent and easily understandable for everybody. People are well off who live in their own flat or house. Residential buildings are the best and safest investment for individuals and institutional investors. Another safe investment class are investments in government bonds. Gold is a volatile asset, but gold performs well during times of crisis and war. Other kinds of investments should be scrutinized cautiously by individuals. The thumb of rule is: high yield – high risk. More about make money issues at the website Make Money Tip.
Liliane Waldner
Liliane Waldner is a business economist. She lives in Zurich. She has been in a member of the parliament of the State of Zurich during 17 years. She has attended the board of several public entities and companies, some of them dealing with the financial markets. Her website is: http://www.makemoneytip.com
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