The most important conclusion of 2008

It's not only a question of lessons to be learned from what happened in the World Economy and on the Stock Markets in 2008, but also a matter of conclusions to be drawn.
The most important conclusion just unexpectedly popped up last week when the Madoff story broke and this week when the effects of the Madoff maelstream begin to appear.

When 'very trusted people' (VTP) suddenly prove untrustworthy, people can begin to lose confidence in: authorities, a method or system, themselves or their fellow citizens.
This year we watched the failings and mistakes of: bankers, brokers, politicians, business leaders, bureaucrats, scientists, advisors, authorities and a lot more.
Even the Securities and Exchange Commission (SEC) failed to control and audit Madoff, although there were allegations of his financial wrongdoing since 1999. (See link beneath)
The latest results will ripple through and eventually calm will be restored, but it's worth thinking about the long term effects of loss of confidence and trust.
As a whole however, Investors and the Investment Community simply shrugg off the Madoff effect on the market, it is no more than a piece of rather shocking bad news. Next year the results will show or not. For the moment it only adds to the recession. And it all depends in how far the hedge funds will be hit.
Even the battered Fortis investors (in the Netherlands) do not seem to have sleepless nights after the news Fortis was hit by a possible 1 Billion Euro loss through the Madoff scam.
Anyway, the world has really changed in 2008! This is our preliminary conclusion by the way, an open door with unknown consequences and opportunities.

President-elect Obama says: 'Regulators have been asleep at the switch'.
This seems to be a common international problem we noticed.

See this link: Obama names 3 more for his financial team, says regulators have been 'asleep at the switch'

SEC chairman says agency failed to probe Madoff
December 17th, 2008

WASHINGTON (AP) — In a stunning rebuke, the Securities and Exchange Commission chairman blames his career regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff, now accused of running one of the largest Ponzi schemes ever.
On Tuesday night, SEC Chairman Christopher Cox ordered an internal investigation of what went wrong and offered a scathing critique of the conduct of his staff attorneys. He said they never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena. Instead, the staff relied on information voluntarily produced by Madoff and his firm.
Credible and specific allegations regarding Madoff’s financial wrongdoing going back to at least 1999 were repeatedly brought to the attention of SEC staff, said Cox.

The Ponzi Scheme

Bernard L. Madoff, 'your friendly uncle'

The Ponzi Scheme is simular to a Pyramid Scheme. It's likely to stay around in good and in bad economic times. Investors should be cautious for investments or investment proposals promising very high yielding returns with little risk.

(From Investopedia)
A fraudulent investing scam that promises high rates of return at little risk to investors. The scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors.

Investopedia Says... The Ponzi scam is named after Charles Ponzi, a clerk in Boston who first orchestrated such a scheme in 1919.
A Ponzi scheme is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. One difference between the two schemes is that the Ponzi mastermind gathers all relevant funds from new investors and then distributes them. Pyramid schemes, on the other hand, allow each investor to directly benefit depending on how many new investors are recruited. In this case, the person on the top of the pyramid does not at any point have access to all the money in the system.
For both schemes, however, eventually there isn't enough money to go around and the schemes unravel.

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The most recent Ponzi Scheme (still developing). It promises to become the worst in history, an ex-Nasdaq chairman accused of a $ 50 billion dollar Ponzi Scheme.
Ex-Nasdaq chair arrested for securities fraud
Bernard Madoff was arrested Thursday and charged with operating a multibillion-dollar Ponzi scheme from his investment advisory business.

The Beurskrach blog will keep you updated, add to your favorites.

Spam en 419 Scams

Nu er een zekere teruggang in de economie duidelijk te merken is neemt ook het aantal scams (oplichters praktijken per email)toe. Op onze site Spam-Boycot houden wij dit al ruim een jaar lang in de gaten. Onbegrijpelijk dat de mensen nog steeds in de scams trappen. Deze scam van het zgn. ICPC NIGERIA (Anti-Fraud Unit)......we fight against fraud, funds delay and impersonation is echter wel bijzonder brutaal.

U vindt meer voorbeelden op:http://www.spam-boycot.com/html/crooks_and_creeps.html
en; http://www.spam-boycot.com/html/scammers.html