Tuesday, December 23, 2008

They should have asked Mike

YEARS AGO I knew a barrel of a courthouse bailiff who sat outside the judge's chambers, chewed on a cigar and observed closely the ways of his world.   Much of what Mike  told me in one and two-syllable words made some sense, the kind of sense you would  expect from courthouse philosophers with time on their hands.  So I asked him about the great Akron-based $11 million Ponzi scheme that I had been assigned to cover for my paper.  Schooled by his deep  interest in the win-place-and-show odds at a nearby racetrack, he squinted knowingly when I mentioned the unraveled scheme by Don Lowers, the Akron lawyer, to build a financial pyramid that was destined to collapse on a lot of sorry investors.

"I went up to his office when I heard about it, went over a lot crap with him and left, " Mike said with a cough and bit of gravel in his voice.  "Naw.  It didn't make no sense to me at all about how you can make so much money in such a short time.  There had to be a catch.  Not with my  money because I didn't give him none. I figured you'd have a better chance laying up two bucks on a three-legged horse.  Naw. I ain't no dummy."

Trouble today is that there aren't enough savvy courthouse horse players  around to know that Bernard Madoff was shuffling all of his money from the bottom of  his private deck.  Interestingly, although it has been in vogue to blame the people being forced from their homes for not reading the fine print  in their mortgages, there is almost no concern about the careless way so many huge money bags were offered up by  people and institutions who might have been more careful about their treasures.  

Corruption has become so widespread in the carpeted offices of the investment industry that the FBI in New York says it is diverting some of its agents from a terrorism watch to the fraud on Wall Street.    "We have to work with those cases we think pose the greatest threat," the FBI's David Cardona told Bloomberg.com.  "In this case it's the threat to the financial system and Wall Street."  How comforting!

But how would the big losers  know?  It's true that the SEC would have been the last people to ask inasmuch as they (as well Alan Greenspan) were fully committed to George Bush's "ownership society" as well as ignoring  lot of other signs of mischief on Wall Street.   That now translates into easy come, easy go, particularly for millions of homeowners. As for the record-breaking  Ponzi,  there are scattered reports of some big companies that rejected Madoff's  preposterous robust investment options.   For all the others, it was too bad that Mike  the bailiff wasn't around to advise the well-paid  company financial advisors.   

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