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Perhaps Wall St. Really Is Just One Big Ponzi Scheme
from the finding-that-last-sucker dept
While we've always been pretty skeptical of the way Wall St. worked, at least it seemed like there was some semblance of reality on which it was based -- even if much of that foundation was a rickety house of cards. Yet, with the revelations coming out about Bernard Madoff's potentially $50 billion fraud, it makes you start to wonder if anything on Wall Street is real. Madoff admitted yesterday that his entire firm was "one big lie" and "basically, a giant Ponzi scheme." It appears that rather than paying investors back based on profits they earned, he was pulling money out of the principal from other investors -- and now there's basically nothing left. Not surprisingly, the firm's website touted Madoff's "high ethical standards." What's even more astounding is that no one happened to notice this was happening until he 'fessed up. At a time when one of the biggest things missing in the market is confidence, this is not going to help. Yes, there is some reality backing at least some of Wall Street, but people are going to have an increasingly difficult time figuring out what is real, and that's not going to encourage much investment. Conceptually, what Wall St. does is provide a very useful service for putting money to use where it's best needed as investment capital. In reality, it looks like there was an awful lot of fraud baked into the system. That's not good for anyone, and the fallout from this is not going to be pretty.
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Reader Comments (rss)
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This can't be good.
What a crazy world. Wasn't it bad enough that we just elected a Chicago politician with an almost completely blank resume to be POTUS?
Yup, things are going to change.
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www.chl-tx.com Without the 2nd amendment, the rest of the document is just wishful thinking. And we are almost there anyway.
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Stocks are legalized gambling. Their value is based on nothing more than the hope that the next sucker will pay you more than you payed the last sucker.
If stock prices were based on something real like dividend, we could not have these large swings in the market. As stocks go down, return goes up assuming dividend remains the same.
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Re: This can't be good.
relevance ?
The two are related in your head, but is there anything real to support it ? Just what are you attempting to say ?
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Re: This can't be good.
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Apparently the scammer had the opposite problem.
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Re:
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Ponzi Scheme?
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Its always a good idea
Now lets put drug addicts in charge of hospitals.
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Re:
Oops. Fixed. Thanks.
Apparently the scammer had the opposite problem.
Ha! Indeed.
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Re:
If a company is profiting, but not paying dividends, it is growing, and hopefully increasing profits further. At some point, a 'sucker' will like the looks of that stream of income and pay a lot of money for the stock, or it will stop growing and start paying dividends.
Stock prices are based, in part, on expected dividends, not current dividends.
"As stocks go down, return goes up assuming dividend remains the same" That is making a HUGE assumption. Stocks go down for many reasons, but one of them is that investors don't think they'll be able to pay dividends at the same level.
In the future, try regardless instead of irregardless. While irregardless is in the dictionary, it is only used by morons.
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Re: Ponzi Scheme?
The market is real. It is based on real value, created by real companies. The values of these companies(like everything else in the world) change. That does not make them any less real.
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Re: Its always a good idea
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That Last Sucker
The last sucker being the taxpayer to bail these guys out.
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re: come on
" It appears that rather than paying investors back based on profits they earned, he was pulling money out of the principal from other investors "
That's exactly a Ponzi scheme. Which is what this was.
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Fraud
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Government sponsored Ponzi scheme
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Ponzi Scheme
www.TRADERTECH.COM
22 Categories: $25,200
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One step closer...
We can all only hope this statement is true.
Yes, I know, many of you think I'm completely nuts to expect a depression, but it's time for one.
Only then will people sit back and redefine what "business" is all about.
Here's a damn hint for you: IT'S NOT JUST ABOUT PROFITS!
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Re: Re:
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price.
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wall street is just a big ponzi , who before their fall are
trying to suck the government into it along with the next
generation who is gona have to pay for it.
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wall street is just a big ponzi , who before their fall are
trying to suck the government into it along with the next
generation who is gona have to pay for it.
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Re: This can't be good.
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Re: This can't be good.
That is quite possibly the stupidest statement I have ever read. Except maybe for the rest of your asinine comment.
What a crazy world. Isn't it bad enough we let people like you out on the streets?
And before you reach some other stupid conclusion, I am a gun owner, a conservative and a Christian. You're just an id10t.
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Editorial of Editorial
This is not news, or commentary, or editorial. It is a summary of something you heard on the wire. How about sticking your neck out a little and forming a new thought.
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Perhaps? No, _*definitely*_
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to rob the unfortunate. Things will always be the same,
as long as the masses are kept ignorant, the financial
kings will make them do whatever they wish, let it be
stock market, or some other scam...
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Silver Trading
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