Nobody knows—except Madoff himself, and whomever his accomplices (if he had any) might be.
But a couple of things are clear now: Madoff kept detailed records of the money as it came in from his clients. But, astoundingly, he never invested a single penny of it, even as far back as 1993.
This blows the theory that Madoff was an honest guy gone bad in the last couple of years as the market began to tank. It makes it more likely that he is some sort of economic sociopath.
What was his motivation, other than to make a lot of money? Didn’t he have enough to begin with?
My guess—and it’s a guess only—is that he liked the game aspects of it. He got off on fooling people and looking down on them for trusting him. If this is the case, Madoff has a lot in common with spies such as Robert Hanssen, whose motives seemed more psychological than ideological or even monetary.
Feeling superior to others was particularly important to Hanssen, who, like Madoff, led a double life. To neighbors and acquaintances, he appeared sober and religious, an upright family man. His secret life was abominable, a series of betrayals that caused the executions of several Soviet citizens spying for our side, and included his arranging for a friend to regularly view his sexual relations with his wife, unbeknownst to her.
Hanssen, like Madoff, wasn’t caught for a very long time, despite the fact that the FBI was tipped off over and over that he might be a mole. The list of missed opportunities and neglected evidence in the Hanssen case would be funny if it weren’t a tragic outrage.
The same is true of Madoff. These guys were very, very good at what they did—which is the old con game of earning trust while simultaneously betraying it utterly and completely.
As I write this, the Dow is down about 176. Personally, I’m surprised it’s not down even more, even though it was near the gutter to begin with.
Let’s see—Obama managed to demonize CEOs, set up all households earning above $250K for higher taxes, as well as businesses of unspecified earnings—in order to fill a wish list of Democratic causes, and all in a recession. Mixed with some prettier words of intended uplift and confidence that seemed very empty and cold (and contrived) to me, although better than his previous unrelenting fear-mongering.
I have to say it—Rahm Emmanuel’s a good-looking guy.
Obama comes to the podium, the place where he’s most comfortable. Who’s that behind him—Joe Biden? Is he still around? In his eagerness to speak, Obama upstages Nancy Pelosi, who gives him a little tap to let him know she has to introduce him. Shades of the inaugural and Roberts.
We start with the bad stuff again—and apparently he’s been reading neo-neocon, because he says “we will…” and then a string of good stuff.
If we import so much oil, and it’s such a problem, Obama, why don’t you go for the obvious solution?
The bad loans—but no mention of the Democrat (and Acorn) responsibility for pushing them. No surprise there, I suppose.
No, of course not, you don’t believe in big government. It was thrust upon you.
How will the American people as a whole respond to this—those who are watching, that is? Well, since most still seem to approve of Obama and trust him, my guess is that this speech will remind them of what they like about him.
Joe Biden, tough head of the tough oversight committee, to make sure the Democrats don’t overdo? Oh, my goodness.
Finally we’re getting to what I’m interested in—the credit crisis. I’d also love to hear what he intends to do about separating out the bad paper from the good. But I hear nothing but nonspecific generalities.
He reads the riot act to those mean old CEOs, the villains of the piece. Obama will keep them in line.
And he nearly apologizes for helping banks—“it’s not about helping banks, it’s about helping people.”
“Slowly but surely, confidence will return, and our economy will recover.” If you say so. It ain’t Churchill, nor is it FDR, but at least it’s better than the crisis-laden gloom. The truth will be in the details, and the results—good or bad.
He rejects those saying government has no role in the recovery. But who’s saying that, except for the most extreme libertarians? Nobody.
“Time for America to lead again”—I’ll drink to that.
Yep, we need clean, renewable energy. So Obama, how about nuclear power? I don’t hear it on your list. The items I do hear are not going to be enough, you know. But isn’t it pretty to think so?
I don’t recall this laundry-list style of speechmaking prior to Bill Clinton, who was the champion of the genre. But here it is again. Has Obama changed speechwriters?
The recovery plan had no earmarks? Wow. Even if that’s technically correct (and I don’t know whether it is or not), the bill certainly didn’t lack for pork or special interest grants that have nothing to do with the goal of stimulating the economy.
A pox on all those 250K households!
“I will not allow terrorists to plot against America…” Boy, is this guy ever full of himself.
Just how does this speech differ from a State of the Union message? I thought it was supposed to be about the economy. It’s all over the place, and loaded with cliches. I wonder why that surprises me.
It’s a sobering reminder of how spiffy new computer models and mathematical formulas related to real-world events can end up as just the old “garbage in, garbage out,” because we don’t know all the variables to include. In the case of something called “Li’s cupola function,” a beautiful mind came up with a beautiful mathematical formula that was applied by investors to mortgage risk, and it ended up spelling economic doom for most of us. Oops!:
It was a brilliant simplification of an intractable problem. And Li didn’t just radically dumb down the difficulty of working out correlations; he decided not to even bother trying to map and calculate all the nearly infinite relationships between the various loans that made up a pool. What happens when the number of pool members increases or when you mix negative correlations with positive ones? Never mind all that, he said. The only thing that matters is the final correlation number””one clean, simple, all-sufficient figure that sums up everything.
A few people warned that the map was not the territory, but their cautions were ignored, and why? Too many people were making too much money, that’s why. At least for a while:
Banks dismissed [warnings], partly because the managers empowered to apply the brakes didn’t understand the arguments between various arms of the quant universe. Besides, they were making too much money to stop.
Here’s the mind-boggling part, to my way of thinking. The following should have been a red flag the size of Texas:
[B]ecause the copula function used CDS prices to calculate correlation, it was forced to confine itself to looking at the period of time when those credit default swaps had been in existence: less than a decade, a period when house prices soared. Naturally, default correlations were very low in those years. But when the mortgage boom ended abruptly and home values started falling across the country, correlations soared.
Don’t blame Li—he just made the model, he didn’t apply it. Those who did were unaware of its limitations, partly because they didn’t get the math, partly because they decided to ignore history, and partly because there was gold in them thar hills.
It’s a goal Obama talked about quite a bit while on the campaign trail, as did McCain. Obama is not unique in having paid lip service to bipartisanship when it was of benefit to him during the election and then dumping it when he didn’t need it to pass some of the most polarizing—and partisan—legislation in history. That’s politics, folks.
But surprise surprise, I’m going to defend Obama for his failure to be bipartisan. The generalized yearning for bipartisanship has always reminded me of the old Rodney King plea, “Why can’t we all just get along?” The answer is—“because we can’t, that’s why.” And that failure is—to coin a phrase—a bipartisan one.
If we could agree, we would. The fact that we don’t is a reflection of the reality that goals differ, and that even when they are the same there is disagreement on what course to take to best reach them.
People sometimes say there’s no difference between the two parties because all politicians are crooks, hypocrites, liars, and self-serving cheats—and the people who say that have a point. But politicians from different parties are a different flavor of crooks, hypocrites, liars, and self-serving cheats, as well as including a smattering of upstanding public servants. Depending on which party is in power at any moment, we are going to see different laws and different policies, with different results.
One would hope that, in the current financial crisis, we would all be able to pull together in a bipartisan way to make things better for everyone. That would be great, if it weren’t for two things: (a) most politicians see crisis as an opportunity to solidify their power and the power of their respective parties; and (2) in the present case, most politicians disagree on the seriousness of the crisis, its causes, and what approach will improve matters. Those are very real differences that are not easily resolved by chanting “bipartisanship” as a mantra.
Most of the bipartisanship in American history has occurred either on trivial issues, or in the passing of bills that nobody ended up liking (McCain-Feingold, anyone?), or in times of defense after a clear and unprovoked attack (Pearl Harbor, immediate post-9/11).
Otherwise, as they say in Brooklyn—faggetaboutit.
[NOTE: Bipartisanship is different from the law of thirds. The latter is simply the principle that if either party goes too far off center in its grab for power and influence, it may alienate the moderate American middle and lose the next election. That is, of course, unless they change the rules in order to further entrench their power, or control the airwaves and print media to such an extent that they control the message. Hmmm.]
I don’t know why I bother with the AP anymore. Maybe it’s because their articles permeate most of the newspapers in the country, and become the reality for so many readers.
Iraq’s restored National Museum reopened Monday with a red-carpet gala in the heart of Baghdad nearly six years after looters carried away priceless antiquities as American troops largely stood by in the chaos of the city’s fall to U.S. forces.
The ransacking of the museum became a symbol for critics of Washington’s post-invasion strategy and its inability to maintain order as Saddam Hussein’s police and military unraveled…
Once the home of one of the world’s leading collections of artifacts, the museum fell victim to bands of armed thieves who rampaged through the capital after the Americans captured Baghdad in April 2003.
It was among many institutions looted across Iraq, including universities, hospitals and cultural offices. But the richness of the museum’s collection ”” and its importance as the caretaker of Iraq’s historical identity ”” led to an outcry around the world.
U.S. troops, the sole power in the city at the time, were intensely criticized for not protecting the treasures at the museum and other cultural institutions like the national library and the Saddam Art Center, a museum of modern Iraqi art.
It goes on. And on. And every word of it is true—and misleading.
It’s not till paragraph fifteen that we find a tiny mention of exculpating evidence:
It could have been worse. Iraqi officials closed the museum several weeks before the U.S.-led invasion and hid some particularly important artifacts at secret locations to prevent their theft.
But still, a person could read the entire article without ever learning that (a) a very tiny percentage of the artifacts were stolen; and (b) many of the thefts were inside jobs that probably occurred before the Americans even got there.
The extent of the looting of Iraq’s National Museum has been disputed. News organizations for weeks reported that as much as 100 percent of the museum’s 170,000 catalogued lots (501,000 pieces) had been looted, when no more than 3 percent of the artifacts in fact were removed, and perhaps only 1 percent of them stolen by outside looters…About 15,000 of the museum’s 501,000 artifacts were stolen, and about two-thirds of the missing pieces probably were taken in an inside job before American troops arrived. About 5,000 pieces, most of them tiny beads and amulets, were taken by looters. According to The Washington Post (Sept. 15, 2003), investigator Col. Matthew Bogdanos estimated that most of the looted items could have fit into one large backpack…[T]the number of major pieces removed from the museum’s public gallery was in the dozens.
Yacoub and the AP either don’t know these facts, or they are well aware of them and have carefully crafted the article to mislead (read: lie) by omission. A reader who remembers the original reports of utter museum devastation could read the new article and continue to believe that this was the case. Nice going, AP!
In Alter’s cover story about Obama entitled “America’s New Shrink,” Alter tells us don’t worry, be happy, even though Obama has utterly failed to perform what even Alter insists is the first job of a president in a peacetime crisis, instilling confidence.
Despite the fact that Alter spends the first page and a half of his article describing the myriad ways in which Obama has failed to do just that for the economy, he still thinks it will happen:
So why do I still think Barack Obama has a good chance of restoring confidence and pulling us back from the brink?…Because my take on Obama, based on conversations with him and his team stretching back more than four years and extending into the White House, is that he has a firm grasp of the psychological and substantive challenges of the presidency.
So Obama’s buddy Alter is willing to ignore the evidence of Obama’s actions as president in favor of Alter’s personal experience of what a smart guy Obama appears to be when schmoozing with the press—and that’s even though the stock market has been falling precipitously since Obama has become president, and particularly every time he proposes a new policy (today, the first day the market has been open since the announcement of the “tax the rich and businesses” plan, is no exception; at the moment we’re down 140 points to the 7220s).
But that’s okay; it’s just not the right time yet for confident optimistic talk, according to Alter:
[Obama] knows that now is not the moment to cheerlead, not when the financial players are lying dazed on the field. There will be time for that, when the banks have been “restructured” (see, that sounds better than “nationalized”) and the credit starts flowing again.
As a “shrink” of sorts myself, I will interject that both leaders—and shrinks—must convey optimism about the long-term picture, and this must be done from the beginning of a crisis.
What’s more, condescension isn’t very helpful. But Alter seems to disagree:
Obama has the chops to sell [his] approach, starting with his already-proven ability to be the nation’s teacher in chief. This was FDR’s secret weapon on the radio, and it can be Obama’s on TV and the Web. He’s the smart, cool instructor, trusted by the class to explain something important even if a little complicated. All that’s lacking is a bit more humor and a few catchphrases to simplify the message.
FDR’s “secret weapon” was not being a teacher. Rather, (although it wasn’t really very secret) it was his buoyant optimism, an attitude that was neither an empty pose nor a strategic ploy but a fundamental part of his personality—perhaps the most fundamental part. FDR’s optimism was both a natural tendency of the man and an attitude accentuated by his hard and personal struggle with polio, and his successful conquering of the despondency that would naturally be faced by most men of action struck down by such a disease in their prime, as FDR was.
The nation understood that Roosevelt was not consdescending to them as “smart, cool, instructor.” Nor was he playing a clever game of timing with his pep talks, being negative at the beginning and positive only when things were already looking up. He was imbuing them with some of the hard-won confidence he’d earned through his own triumphs over adversity.
FDR was a naturally ebullient man; Obama is most decidedly not. Take it from another great, Winston Churchill, who ought to know:
Meeting Franklin Roosevelt was like opening your first bottle of champagne; knowing him was like drinking it.
I can’t quite imagine anyone saying that about Obama; meeting Obama is more like taking some cod liver oil.
Speaking of Churchill—now there was a man who knew who to balance optimism with realism. But he could never be compared to champagne; more like a fine port. Churchill’s optimism, like that of FDR’s was no pose—it was his natural tendency, and his eloquence and delivery guaranteed that he could deliver the message to perfection.
The main thrust of what Churchill told the British people and the world—and he said it right from the start, at the darkest hour; he did not wait for things to get better!—was that even though the way would be incredibly difficult, the Allies would prevail. Intrepid perseverance was his forte, and he was able to transmit his own endurance to the British people, and in the process amplify theirs.
In his very first broadcast after taking office, in May of 1940, Churchill doesn’t mince words about the darkness of the situation facing the Allies. But every passage in which he describes the depth of the peril is followed by a firm affirmation that victory is never in doubt:
We must expect that as soon as stability is reached on the Western Front, the bulk of that hideous apparatus of [German] aggression which gashed Holland into ruin and slavery in a few days will be turned upon us. I am sure I speak for all when I say we are ready to face it; to endure it; and to retaliate against it…
Our task is not only to win the battle—but to win the war. After this battle in France abates its force, there will come the battle for our Island—for all that Britain is, and all the Britain means. That will be the struggle. In that supreme emergency we shall not hesitate to take every step, even the most drastic, to call forth from our people the last ounce and the last inch of effort of which they are capable.
Here is my favorite—and the most famous—part of Churchill’s speech. It occurs towards the end, and is an almost perfect example of Churchill’s ability to convey the depth of the horror facing Europe while at the same time transmitting to his listeners a near-guarantee—by the sheer force of his own will and determination—of their ultimate victory:
[N]ow one bond unites us all—to wage war until victory is won, and never to surrender ourselves to servitude and shame, whatever the cost and the agony may be. This is one of the most awe-striking periods in the long history of France and Britain. It is also beyond doubt the most sublime. Side by side, unaided except by their kith and kin in the great Dominions and by the wide empires which rest beneath their shield—side by side, the British and French peoples have advanced to rescue not only Europe but mankind from the foulest and most soul-destroying tyranny which has ever darkened and stained the pages of history. Behind them—behind us—behind the Armies and Fleets of Britain and France—gather a group of shattered States and bludgeoned races: the Czechs, the Poles, the Norwegians, the Danes, the Dutch, the Belgians—upon all of whom the long night of barbarism will descend, unbroken even by a star of hope, unless we conquer, as conquer we must; as conquer we shall.
[NOTE: I couldn’t find an audio of the above speech of Churchill’s, so I offer the following substitute.]
[ADDENDUM: Commenter AuH2O has kindly led me to the correct You Tube video (the quoted part begins around 1:35):]
[ADDENDUM II: My colleague and friend Shrinkwrapped has a shrink’s take on it all.]
Whaaaa?? you say. But I think we need some lightness for a change. And there’s hardly anything lighter than the Oscars. They nearly levitate with their lack of gravitas—not to mention the hot air of the stars’ pomposity.
Yes, even though I hardly ever watch movies these days, and could hardly care less about the lives of film celebrities, I almost always try to watch the Oscars for one thing: the fashions.
I have no idea who host Hugh Jackman is. But trusty Wikipedia tells me that he’s an Australian star of screen and the musical stage. Jackman played the lead role of Billy Bigelow in a recent production of the Rodgers and Hammerstein musical “Carousel.” So tell me why his singing sounded so ghastly during the opening number that I had to mute the sound?
The usual unctuous, self-congratulatory garbage goes on. Yada yada yada. But as I said, it’s the fashions that interest me.
The following monstrosity made Tinda Winton (who???) look as though she’d been exhumed for the occasion, proving that beige is one of the most difficult colors to wear—especially for those who are somewhat beige and washed-out to begin with:
For a contrast, see Kate Winslet in a classy shade of blue that looks a bit like a moonlit night sky:
Sophia, Sophia, Sophia. Ah, Sophia girl, we’ve got to talk. When I wrote this heartfelt tribute to you a while back, I never could have guessed that you’d betray my trust by turning up as the main character in “Hello Dolly.” But that sad day has come (and the dress is beige, yet):
Beyonce has turned herself into a cross between a divan and a mermaid:
I deserve some sort of special award myself for just attempting to watch this swill. It is far more boring than usual, and that’s saying an awful lot. So far, no video montages of old films either, one of the few things other than the fashions that I usually look forward to.
To top the evening off, Sean Penn just said he’s proud to live in a country that has the (I think the next word was “courage;” not sure though) to elect an elegant man president. Wow.
And now, just when I’d given up—a montage of old films! But unfortunately, the featured film clips are mostly about politics. And some of them aren’t even old. Given those parameters, how did a moment of “The Graduate” sneak in there?
