by Mike Masnick
Thu, Dec 11th 2008 5:22pm
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.
If you liked this post, you may also be interested in...
- Large-Scale Peer-Review Fraud Leads To Retraction Of 64 Scientific Papers
- Former Security Director For Lottery Charged With Tampering Equipment Before Secretly Buying $14.3 Million Winning Ticket
- Huffington Post Finally Removes Most Articles About Fake Email Inventor; Meanwhile, Ayyadurai Threatens To Sue His Critics
- More Federal Employees Caught Using Work Computers To Access Porn, Claim 'Boredom' Made Them Do It
- USPTO Tried To Hide Abuse And Fraud By Patent Examiners From Inspector General