Madoff, the SEC, and the Free Market.

Madoff, the SEC, and the Free Market. (Full Version)

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variation30 -> Madoff, the SEC, and the Free Market. (12/18/2008 10:35:24 PM)
In light of the rather recent news that Madoff and his hedge fund were able to create a 50 billion dollar ponzi scheme, do you think more government intervention is needed to protect consumers? Do you think less dependence upon "public" programs and more utilization of market solutions is a better route? I would suggest that the SEC, like any other public institution, does a rather poor job compared to its market alternatives. Due-diligence firms are sought out by enlightened individuals who are concerned about their future investments. These individuals (rightfully) did not trust the SEC to do a competent job and turned to a market alternative. They willingly traded their cash for the due-diligence firm's services and as such, knew to steer clear from hedge funds like Madoff's (http://www.cnbc.com/id/28195326). I'm of the opinion that an expansion of public programs/government regulation will only further expand the potential for fraud and deceit...whereas reliance upon non-coercive firms held to market competition would do much more to protect investors.

popeye1250 -> RE: Madoff, the SEC, and the Free Market. (12/18/2008 10:50:22 PM)
The more "degrees" in an industry like finance the more oversite is needed. Those people need much more supervision than truckdrivers. And that Medov or Madoff or whatever his name is should be in a jail cell. There's a 100% chance that he'll end up behind bars for the rest of his life, and he's out on bail? Who thinks he doesn't have $100m socked away somewhere? De-regulation just doesn't seem to work very well. Look at the Airlines.

variation30 -> RE: Madoff, the SEC, and the Free Market. (12/18/2008 11:10:42 PM)
what about the airlines? when deregulations are you talking about? and Madoff has a lot more than 100 million stashed away. also, why should he be behind ars for the rest of his life...that does sound a bit extreme. I don't think running a ponzi scheme should have the same punishment as sometihng like murder.

NeedToUseYou -> RE: Madoff, the SEC, and the Free Market. (12/18/2008 11:24:53 PM)
I think regulation as we have it, is more dangerous than no regulation. Why? Because it gives a false sense of security and trust that things are being watched when they really aren't. If it were truly deregulated, then at least people would realize the shit is dangerous and probably be more careful. Anyway, instead of regulation, why not just require a 100% open books for any company worth over a million or something. I don't know, that is about the only way to make it "safe" and known. Regulators, get bought. Anyway, I doubt much will change, it's fighting human nature. Corruption is innate. The real problem though at the very core is there are to many types of financial instruments. I see little reason why there should be anything more than a long position, and simple insurance. Everything else is just complication. And taxes, should all be consumer side. Simple, anybody could then evaluate companies effectively. Whichever the solution ultimately, I'm sure one component is simplification, as this messes are hidden in the arcane, until they erupt.

variation30 -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 12:10:37 AM)
quote: ORIGINAL: NeedToUseYou I think regulation as we have it, is more dangerous than no regulation. Why? Because it gives a false sense of security and trust that things are being watched when they really aren't. If it were truly deregulated, then at least people would realize the shit is dangerous and probably be more careful. who feels comfortable knowing that the ever-vigilant eye of the government is looking out for them? danger is stil there, despite our public gaurdians. quote: Anyway, instead of regulation, why not just require a 100% open books for any company worth over a million or something. I don't know, that is about the only way to make it "safe" and known. Regulators, get bought. wouldn't that put a damper on competition...you know, the only thing that ensure quality. quote: Anyway, I doubt much will change, it's fighting human nature. Corruption is innate. I beg to differ (though this depends on how you define corruption).

LadyEllen -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 4:18:22 AM)
quote: ORIGINAL: variation30 also, why should he be behind ars for the rest of his life...that does sound a bit extreme. I don't think running a ponzi scheme should have the same punishment as sometihng like murder. It seems entirely reasonable to me for him to receive a substantial prison sentence and for his estate to pay a substantial fine such that the stolen funds might be recouped in order to pay out - even at cents in the dollar - those who have fallen prey to yet another scamster. Mr Madof's family may be innocent in all this, but they have no claim to the monies derived from this crime; thus it is reasonable to expect his estate to pay such a fine. That the substantial prison sentence given his age will likely mean he dies in prison is a matter of no concern whatsoever. A signal must be sent here; the punishment for such crimes is so substantial that no one should risk it. It must also be a heavy sentence in that it must set a precedent by which others in the sector found guilty of crimes can be sentenced. If Madof gets five years for such a crime (for instance) then those guilty of lesser crimes can argue for very unsubstantial sentences. And we have to consider that whether he has murdered or not, his private victims are numerous and ruined; we can likely account many deaths to his deeds, whether that is elderly investors for whom the shock and stress will prove too much or younger investors for whom suicide becomes an option. Notions of caveat emptor are redundant here; they are not victims of the market here but victims of a crime. E

celticlord2112 -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 5:25:20 AM)
quote: also, why should he be behind ars for the rest of his life...that does sound a bit extreme. I don't think running a ponzi scheme should have the same punishment as sometihng like murder. True, a ponzi scheme should not have the same penalty as murder. The ponzi scheme is far worse. Hanged, drawn, and quartered would be my recommended punishment.

Crush -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 5:57:23 AM)
We already have a government sanctioned Ponzi scheme in the US: Social Security.

celticlord2112 -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 6:15:36 AM)
quote: ORIGINAL: Crush We already have a government sanctioned Ponzi scheme in the US: Social Security. So let's hang, draw, and quarter everyone in government. Sell tickets to the event and call it economic stimulus.

rexrgisformidoni -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 6:31:28 AM)
quote: ORIGINAL: celticlord2112 quote: ORIGINAL: Crush We already have a government sanctioned Ponzi scheme in the US: Social Security. So let's hang, draw, and quarter everyone in government. Sell tickets to the event and call it economic stimulus. lol this made me spit coffee on my screen. I think this bonehead ponzi scheme guy should be in a super crowded prison, in general population. Like one of the converted gymnasiums where they warehouse people. at night no one comes running.

UncleNasty -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 6:47:19 AM)
There are already plenty o regulations and regulatory bodies in and with various jurisdictions - local, state, federal. If these bodies and officials would take the time and responsibility to do their jobs from time to time much of what we're experiencing in our economy would not be happening. I recall mentioning a while ago some vague details of a governmental and regulatory official in China being charged with accepting a bribe from one of the corps he was supposed to be regulating. He was convicted of the charges and quite literally was hung the day of his conviction. I expect that is pretty good motivation for other officials to do their job and stay on the side of legality. Uncle Nasty

MrRodgers -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 6:51:42 AM)
quote: ORIGINAL: celticlord2112 quote: also, why should he be behind ars for the rest of his life...that does sound a bit extreme. I don't think running a ponzi scheme should have the same punishment as sometihng like murder. True, a ponzi scheme should not have the same penalty as murder. The ponzi scheme is far worse. Hanged, drawn, and quartered would be my recommended punishment. Hanging them first would exclude D & Q...then it's just pulling apart the garbage.

Crush -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 9:11:22 AM)
quote: ORIGINAL: celticlord2112 quote: ORIGINAL: Crush We already have a government sanctioned Ponzi scheme in the US: Social Security. So let's hang, draw, and quarter everyone in government. Sell tickets to the event and call it economic stimulus. I'd have to buy a ticket....though I'll be outside selling rocks and rotten vegetables.....

celticlord2112 -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 9:13:05 AM)
quote: Hanging them first would exclude D & Q...then it's just pulling apart the garbage. Not at all.....this sort of hanging is a slow asphyxiation until almost dead. The disembowelment and emasculation (drawn) and dismemberment (quartered) are done while the felon is still among the living.

UncleNasty -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 9:22:43 AM)
CL, is this gruesome descritpion taken from the pages of "Maleus Malificarum?" Uncle Nasty

MrRodgers -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 10:05:58 AM)
quote: ORIGINAL: variation30 In light of the rather recent news that Madoff and his hedge fund were able to create a 50 billion dollar ponzi scheme, do you think more government intervention is needed to protect consumers? Do you think less dependence upon "public" programs and more utilization of market solutions is a better route? I would suggest that the SEC, like any other public institution, does a rather poor job compared to its market alternatives. Due-diligence firms are sought out by enlightened individuals who are concerned about their future investments. These individuals (rightfully) did not trust the SEC to do a competent job and turned to a market alternative. They willingly traded their cash for the due-diligence firm's services and as such, knew to steer clear from hedge funds like Madoff's (http://www.cnbc.com/id/28195326). I'm of the opinion that an expansion of public programs/government regulation will only further expand the potential for fraud and deceit...whereas reliance upon non-coercive firms held to market competition would do much more to protect investors. You can't possibly be serious. You must be too young to know the real business world and especially in corp. America. With the 1000's of restated earnings of public corps., the guilty pleas and partial breakup of the major accounting firms who were right in bed with their public corporate scum clients over the last 20 years...you are dreaming. The Madoff world IS the world of wall street while some are singularly more greedy, corrupt and successful than others...for a while. It is in fact that very competition for capital in the money (worthless paper) markets that fuels the greed and immorality of wall street, yet you still have this romantic notion of the marketplace voluntarily regulating itself and becoming those virtuous captains of industry. Unbelievable on its face. You let the capitalist have an inch...he'll take a mile and the govt. regulators in bed with him were likely dreaming of leaving the govt....to join him.

jakelogan01 -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 10:25:04 AM)
free markets are the best, of course, except that they are a theoretical construct that doesn't exist. they require a level of fragmentation and information transparency that just doesn't exist. it is not a matter of more or less regulation but a matter of better regulation of markets and competent and independent supervisory agencies to police them (self regulation is a myth at best). the sec is staffed by accountants and lawyers who have no clue about financial markets. the (current) treasury is managed by investment bankers who know about dealing but not finance. the federal reserve doesn't have the necessary access to the institutions it is suppossed to supervise. yes, markets do work. that's precisely why they need good policing

celticlord2112 -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 10:25:43 AM)
Actually, I'm going on the strength of transcripts of the trials and executions of the regicides in 1660, after the Restoration. Presumably William Wallace was dispatched in like fashion.

corysub -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 10:54:34 AM)
It wasn't government that exposed Madoff but the "free markets". The SEC failed just as Congress failed in its oversight of FannieMae and FreddieMac. It was the decline in the stock market prompting people to ask for their money from Mr. Madoff that brought down the house of cards. His sons turned him in only after the scheme blew up! He was taking money from people as recently as a month ago, and not multi-millionaire's either. The SEC had been sent letters of concern about the Madoff enterprise and no one followed-up. He was such an "upstanding figure" in the community...above reproach...and now we find out he also thought he was above the law! Cox has done a terrible job at the SEC and this follow on his removal of the uptick rule that allowed hedge funds to decimate stocks was one of his most blatant acts of stupidity.

blacksword404 -> RE: Madoff, the SEC, and the Free Market. (12/19/2008 11:02:48 AM)
quote: ORIGINAL: variation30 what about the airlines? when deregulations are you talking about? and Madoff has a lot more than 100 million stashed away. also, why should he be behind ars for the rest of his life...that does sound a bit extreme. I don't think running a ponzi scheme should have the same punishment as sometihng like murder. He puposely took away people future. So take away his. This would be cruel but fuck him.

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