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A world gone Madoff
Now thousands, possibly tens of thousands, of investors confront losses that range from serious to devastating. Some families said on Friday that they believed they had lost all their savings. A charity in Massachusetts said it had lost essentially its entire endowment and would have to close. According to an affidavit sworn out by federal agents, Mr. Madoff himself said the fraud had totaled approximately $50 billion, a figure that would dwarf any previous financial fraud. At first, the figure seemed impossibly large. But as the reports of losses mounted on Friday, the $50 billion figure looked increasingly plausible. One hedge fund advisory firm alone, Fairfield Greenwich Group, said on Friday that its clients had invested $7.5 billion with Mr. Madoff. The collapse of Mr. Madoff's firm is yet another blow in a devastating year for Wall Street and investors.(...) Investigators have not explained when they believe the fraud began, how much money was ultimately lost and whether Mr. Madoff lost investors' money in the markets, spent it, or both. It is not even clear whether Mr. Madoff actually made any of the trades he reported to investors. New York Times
On Friday, rumours were rife that well-known European families had put large amounts of money with Madoff, and could be facing huge losses - although those contacted all declined to comment. Financial Times
It is all getting so wearily familiar: Iraq, Enron, the bubble, Blago... What they add up to is an ocean of fraud where some fish swim and all others have drowned, are drowning, will drown.
History is full of swindlers and swindles, but they seem to be coming thicker and faster now and they all seem to center around things that are supposed to exist but don't, be they financial assets, weapons of mass destruction or the honor of high office.
Most of us like to make fun of the "End of Days" and "Rapture" crowd, but I think that there is something healthy in their rebelliousness, in their desire to infuse meaning and transcendence into something we all know stinks. At least they give the garbage we are forced to feed on its proper importance.
The apocalyptics at least have the need to wrap this Stygian mess in the breathtakingly noble language of King James' Hebrew poetry or the lurid magnificence of John of Patmos, because neither the newspapers and certainly not today's Hollywood have the chops to do justice, much less deal with, what we are experiencing.
Lacking any contemporary scientific mind with the powers of Marx, who would be able to dissect our fetid reality with a view to changing it, at least we could find some poetic way of speaking about it or some ritual way of dealing with it.
Looking outside our immediate traditions: a Hindu would long for a new incarnation of Rama, the god of righteousness, to restore Dharma and slay the demon rakshasas that infest us. Here is Wikipedia's description of rakshasas which will ring a bell with many readers:
Rakshasas are notorious for disturbing sacrifices, desecrating graves, harassing priests, possessing human beings, and so on. Their fingernails are venomous, and they feed on human flesh and spoiled food. They are shapechangers, illusionists, and magicians.According to the Hindu traditions we are living now in an epoch called the Kali Yuga, which the Vishnu Purana describes thus:
"In the Kali Yuga, there will be numerous rulers vying with each other. They will have no character. Violence, falsehood and wickedness will be the order of the day. Piety and good nature will dwindle slowly... Passion and lust will be the only attraction between the sexes. Women will be the objects of sensual pleasure. Dishonest will be the bottom line of subsistence. Learned people will be ridiculed and put to shame; the word of the wealthy person will be the only law."That sounds like a perfect fit, but I'm afraid that Sri Rama's dealing with the rakshasas' collective ass looks like it might have to wait till another yuga.
Switching traditions for a moment, many today might seriously contemplate outsourcing American justice to Iran's Ayatollahs and then spending many a pleasant family evening around the TV watching deserving heads and hands being lopped off and even a few selected stonings: the bit where they hang miscreants from towering construction cranes looks especially satisfying in present circumstances.
What is indisputable is that we live in a period where it distinctly feels like something very dark and nasty is coming to a head. So, I would say that we should try to listen to our Bible thumping brethren with the sympathy of Carl Jung. These people are at least attempting to find fitting language to describe what is literally destroying society and perhaps the planet, while the rest of us just stand around and quibble.
Beside the Bible and Shakespeare we also have Judge Roy Bean, in our traditions, perhaps the answer to all this lies with him.
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Good piece, David.
And we've only just begun to sense the stink.
Rakshasas, indeed.
December 14, 2008 4:09 PM | Reply | Permalink
The sky is falling!
(maybe.)
December 14, 2008 4:21 PM | Reply | Permalink
C'mon chicken... give us odds. We need odds!
(So we can go short the market.)
;-)
December 14, 2008 6:35 PM | Reply | Permalink
David, you are making me think again. After I first saw this felon's SPECTACULAR theft, I wrote something about the number of freezers it would take to hide the money. And I still wonder, where the hell did it go.
If I recall, Rama had ten thousand years of good times after he was nearly shunned and sold his wife out--although she survived to celebrate the eons with him.
There's something happenin here and you don't know what it is, do you Mr. Jones?
Bwakfat might have it right and I might need more than my aluminum foil hat. I will repeat, like I am wont to do, I was sure the world was coming to an end in 1968.
I am hoping through crisis as so many others have written, we get an entirely new society. Like 1933.
December 14, 2008 5:56 PM | Reply | Permalink
Reports of Madoff's admitting his fraud to his sons and others sounded like the guy from Michael Clayton...
"I am Shiva, God of Death."
http://www.youtube.com/watch?v=Z_Vl4QfWZJM
December 14, 2008 7:09 PM | Reply | Permalink
I think his sons were in on it all. He had them turn him in to the police in order to give them enough time to hide some of the loot before they get arrested too.
December 15, 2008 1:44 AM | Reply | Permalink
Frauds like this Madoff scheme often come apart when the 'good times' in the stock market come to an end. What is unusual is the size of the fraud and the ineptness of the SEC.
It is frankly nice to see some super-rich types getting the middle class equivalent of a pink slip, hell they deserve to feel the pain.
Perhaps in the Hindu tradition the formerly rich can wander from village to village as 'renouncers' who have no worldly possessions.
December 15, 2008 12:07 AM | Reply | Permalink
That's a great idea! You know the motto of the sadhus? "Eat like a dog, sleep like a fox".
December 15, 2008 1:45 AM | Reply | Permalink