I think I've missed the story, re Madoff. Last night Adam Horowitz wrote me, "I get your interest in the ethnocentrism angle, but I'd remind you of the dollars and cents angle - how much money has the Israel lobby lost in the past few days? Madoff, combined with the possible growing realist political shift, might be adding up to a perfect storm for the lobby in DC (or as perfect as we're going to get). Now only if people are ready to exploit the opportunity." Huh.
Then this morning my wife was talking to a leftwing activist friend in England, and she had the same line. She laughed about the Madoff scandal. "These are the people who have been funding Israel and the occupation," she said, "I hope it drains them." My wife asked her friend how she was doing for money. "Poor. Poor. Last week we ate twigs, this week we're eating the bark at the bottom of the bag."
(And yes: apologies for literary license to the Gazans, who truly are eating grass.)
Adam Horowitz seems to be an ideal complement to you, Phil. Perhaps you could allow him to write a little personal introduction, so that we know something about him.
Your wife's friend's joke ("Last week we ate twigs, this week we're eating the bark at the bottom of the bag.") is grimly ironic given the stories emerging from Gaza.
I dont understand all this gloating over zionists losing money in the Madoff Ponzi scheme. Or maybe the people doing the gloating do not understand Ponzi schemes.
Money never disappears from Ponzi pyramids. Someone always walks away with it; someone who is richer and more crooked than the suckers who got soaked. How do we know that the money did not go from the rich and zionist, to the super-rich and super-zionist?
Someone took the 50 Billion
Good point, Jawad. I think we can count on Phil to miss the boat here. It parallels his thinking on Israel in general, as if the whole giant nuclear superpower were just some bad dream that could be removed by YES WE CANing it.
Israel remainsa superpowe, America remains in charge, Phil remains unemployed.
Since you are trying to use it as a launching pad for your (very jewish, and very amateur) attempts at psywar on Phil, I shall repeat what I already said about this : I rather think you will soon see all these zionist funders absconding from the USA and turning up as valued additions to the financial élite of Beijing.
Madoff feeder funds levied high fees
Henny Sender, Financial Times, Dec 15 2008
link to ft.com
The âfeederâ funds that channelled money to Bernard Madoff charged their investors high fees that in some cases exceeded the norms of the hedge fund industry, people familiar with the matter say. Madoff received much of his funding from feeder funds run by so-called funds of hedge funds. These funds of funds are paid by investors to perform due diligence on hedge funds and allocate money among approved managers. Typically, funds of hedge funds charge a 1% management fee and take 0-10% of the profits. This would be in addition to the fees charged by the underlying hedge funds, which usually take a 2% management fee plus 20% of the profits above a certain level, known as the hurdle rate. Fairfield Greenwich, a feeder fund that invested $7.5bn with Madoff, charged a 1% management fee and took 20% of the profits, according to a person familiar with the matter. Suzanne Murphy, managing director of Tri-Artisan, a hedge fund consultancy, said she believes other Madoff feeder funds charged fees similar to those at Fairfield Greenwich. At such levels, she claimed, âThese organisations were more partners of Mr Madoff than clients.â In general, generous arrangements such as large performance fees âraise questions about conflicts of interest and caveat emptor,â according to the general counsel of the alternative investment division of one bank. The head of the hedge fund practice at one law firm, added: âAt a certain point, if you get outsize compensation, you can argue that you lose the incentive to do due diligence.â In many cases, the feeder funds that worked with Mr Madoff also did so with few conditions, such as ones requiring that minimum returns be reached before fees would be paid, according to people familiar with the matter. In some cases, the private wealth arms of banks that channelled money to such feeder funds also received payments from these funds. Madoff did not charge his investors fees, but was paid through commissions on his trades, all of which went through the broker-dealer he controlled. Because he did not charge typical fund performance fees, he earned a reputation among some investors for being a lower-cost manager. Tremont Group Holdings, which recently gave more than $3bn to Madoff through several channels, received an average 1.25% management fee, which amounted to at least tens of millions of dollars every year, said people familiar with the matter. Most of that money had minimal requirements such as a hurdle rate on performance, though. Most of the Tremont money was handled through a subsidiary separate from its fund of hedge funds. Only 7% of Tremontâs fund of funds was invested with Mr Madoff, said people familiar with the matter.
Jawad, my understanding so far has been that the returns Mr. Madoff paid to his investors were quite substantial. If you aren't generating a profit, and are paying high dividends out of your capital, you can burn through it in several years. For example, paying 20% returns means you are broke in only 5 years, less if you are giving out philanthropic stacks of cash. I don't doubt for a second that there is still a load of cake left by normal people's standards, and that he is probably taking the bullet for his sons who 'turned him in', but the notion that there has to be some dark conspiracy here, some angle that will never be revealed, is nonsense. He probably started out with the best of intentions, then realized one day that he couldn't possibly stay solvent. He had two choices, admit he messed up and face his friends and investors with the ugly reality right away, or put off the inevitable by 'going Ponzi'. I fully believe him when he said it was a Ponzi scheme, I just don't think that it started out that way.
If it ended up a ponzi scheme, what's your point, CM?
"These are the people who have been funding Israel and the occupation,"
Maybe in an indirect way.
The American taxpayer pays for the occupation of the West Bank and Gaza …. And we paid even more when those commercial airliners slammed into our buildings and killed our innocents.