Category Madoff Scam

Jan 18 2023

The Madoff Cover-Up


Armstrong Economics Blog/Banking Crisis Re-Posted Jan 18, 2023 by Martin Armstrong

For those who just read the news and believe whatever they report, in the industry, everyone talks all the time. If Madoff was losing billions trading, everyone would have known. It is one thing to have a portfolio of assets that itself collapses in value which would NOT involve trading, then that presents a more private issue but everyone would suspect something for the news would be circulating around as to what he bought. There is just no way money vanishes. The likely prospect is that Bernie was aware of the dark side of Wall Street and perhaps facilitated that for a price.

Bernie’s case began on December 10th, 2008. Lehman Brothers and Bear Stearns both collapsed and the Fed took over Fannie & Freddie. The collapse of Lehman shocked the world and that unleashed real panic. That above all took down Madoff, but then came the bailout of AIG which was really to save Goldman Sachs. No doubt, Bernie was hit with withdrawals and on whatever investment he did have in place, he would have lost a fortune without a Ponzi scheme. With the practice of laundering money going on in NYC, no doubt the counterparty risks collapsed. That most likely pushed Bernie over the edge.

Understand one thing. Madoff did not collapse in isolation. His losses were curiously suddenly attributed to a Ponzi scheme. That was very convenient. Calling something a Ponzi scheme as a matter of law meant that EVERY transaction was a fraud. Therefore, that cuts off all investigations to understand what really happened. It is no longer needed because everything and every transaction need not be investigated because it was all Bernie as a fraud.

As long as they called it a “Ponzi Scheme” there was no investigation into money laundering.

Jan 17 2023

The Majority MUST Always be Wrong


Armstrong Economics Blog/Training Tools Re-Posted Jan 17, 2023 by Martin Armstrong

Following the crowd of what is popular and supposed to be the cutting edge of investment, Robert Belfer, the oil Barron, lost billions with ENRON and then Bernie Madoff. Then he became a shareholder in FTX. With a track record like that, you certainly would be firing your financial adviser.  The inside joke about DAVOS is that whatever the theme forecast they put out and what they all talk about has NEVER been right. The joke is to do the opposite of the DAVOS forecast and you will make money. Andy Serwer, editor-in-chief of Yahoo Finance, asked Warren Buffett in a 2019 interview about the DAVOS forecasts. He responded: “Well, I pay none as a guideline to doing anything,” Buffett responded. I have said many times, the majority MUST be wrong for they provide the market energy to create the boom/bust cycle. Because the majority buy the high, when they sell, you get the crash. When everyone is short at the bottom, you get the rally.