The loss transfer scheme met with more than a cold shoulder from the public. It met with outright hostility. One New Jersey congressman said his calls were running 50-50: 50 percent “no,” and 50 percent “Hell no!”

The bailout also generated the derision it deserved. One blog posting described it succinctly: “Taking money from people who made good investments and giving it to people who made bad investments will make good investments in the future and the people who made good investments will keep making them even though they will have less money to do so.”

The lame-duck president let Secretary Paulson call the tune, while he tap-danced through a couple of White House performances: “…without immediate action by Congress, America could slip into a financial panic.” (His first treasury secretary, Paul O’Neill, said of the president at the time, “I don’t think he understands or knows much about any of this and it shows.”) Paulson, the former Goldman Sachs CEO, was determined to reliquefy Wall Street even at the risk of the treasury’s solvency. The bailout was sold to the governing classes under the guise of reinflating the mortgage market, an act of self-evident futility. If the last bubble could be reinflated, people would still be coughing up million s for dot-com business plans scrawled on cocktail napkins and the NASDAQ index would still be over 5,000. Unlike their counterparts in the Senate, members of the House, closest to the people and all up for reelection in a month, resisted the bailout at first go-around, but the pork fest of more giveaways, the heavy arm twisting, and talk of opponents being blamed for the next Great Depression prevailed. One representative, Brad Sherman, D-CA, claimed on the House floor that members were told without the bailout there would be martial law in America. And so the Paulson plan passed, a mechanism to transfer the losses from institutions that in the expectation of gain willingly undertook the risk of loss to those who had no opportunity for gain or willingness to undertake loss.

If the idea seems antithetical to the American way, it is. Philosophical consistency is not to be expected from politicians, but shouldn’t shame for supporting the giveaway have spread rampantly among Republicans? After all, the 2008 Republican platform had just been passed at the beginning of September. It addressed the mortgage meltdown in these terms: “We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself.” And what about modern-day conservatives who some years before opposed Hillary-care, insisting that socialized medicine is a mistake for the body politic? How then had socialized investment banking become overnight a prescription for economic health? When foreign heads of state, from Iran’s President Musaddiq, who was toppled for it in 1953, to Putin in Russia or Chavez in Venezuela, nationalize their country’s oil, they become enemies of the American state. But when American leaders nationalize finance, the people are told it’s for the good of all concerned. Before long South American Marxists including Hugo Chavez were taking great delight in calling “Comrade Bush” a fellow traveler.

The early costs of the frenzy of “rescues” were astonishing. A week into October, Bernanke claimed the Fed had already committed $800 billion in loans to banks and other activities, and that was before $200 billion for Freddie and Fannie and before the $700 billion bailout. The bailout gave news life to the expression “Legislate in haste, repent at leisure.” It only took a couple of months to notice that the bailout produced none of the promised results in mortgage values. The Treasury handed out the first tranche of the TARP money, $350 billion with virtually no accountability for how the money would be spent. Early in 2009 the Congressional Oversight Panel was able to conclude that the Treasury had paid $78 billion more than market value for the first $254 billion it spent.

While all eyes were on the bailout debate, September 30, like some eerie fiscal planetary conjunction, went unnoticed, a silent harbinger of America’s economic future. While fiscal year 2008 ended that day, rolling up an all-time-high deficit of $455 billion, the explicit national debt actually increased by more than a trillion dollars for the year, breaking through an astronomical $10 trillion. Meanwhile, all but eclipsed by the debate over the bailout bill, President Bush signed another stopgap spending bill that day. This one was for $634 billion, including $5 billion in earmarks, $25 billion in low-interest loans to automakers (yes, even foreign ones!), and a 6 percent bump in Pentagon spending. By the time he signed the bailout bill three days later, it had been a $1.34 trillion week. As part of the bailout, commanding the sun and the moon of economic reckoning to stand still, Congress raised the national debt ceiling to $11.315 trillion. (Four months later it would raise the debt limit again, this time to $12.1 trillion.)

The Paulson plan was presented as an attempt to undo the harm of mortgage market excesses by again inflating mortgage assets on the balance sheets of Wall Street players. It was a strange, homeopathic remedy, a “hair of the dog” approach for a problem that was caused by excess credit engineered the Federal Reserve to begin with. Rather than letting housing prices that had inflated beyond sustainability deflate, instead of letting a market of buyers and sellers arrive at some equilibrium, at values that reflected the actual conditions of supply and demand, the plan called for more of the asset inflation that led to the pumping of more air into the tire that had already had a blowout was ridiculous on its face, and the populists were right in suspecting that it was Wall Street welfare, a case of the politically connected of American finance passing the Old Maid of loss to the people.

Informed observers, the Cassandras who had seen the bubble forming and tried to raise the alarm when it would still do some good, were, of course, not consulted about the plan. Five years to the month before the Fannie and Freddie bubble popped, Congressman Ron Paul introduced a measure that would have avoided the calamity. His September 2003 remarks in the House Financial Services Committee on the dangers of government-sponsored enterprises (GSEs) like Fannie and Freddie are nothing less than a shockingly precise preview of exactly what came to pass:

“This explicit promise by the Treasury to bail out GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt…

“Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market…

“Despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever.

“When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

“Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.”

In viewing the Paulson plan, the Cassandras must have wondered how often the same discredited economic nostrums need to be refuted. But the administration didn’t turn to Ron Paul for advice. Nor did it consult the scholars at the Ludwig von Mises Institute, who had warned about the government-sponsored expansion of bank credit and money and its inevitable cycle of bubbles and busts. Instead Bush turned to Henry Paulson and his team from Goldman Sachs, despite the fact that under Paulson’s leadership as CEO, Goldman Sachs had been among the industry’s leaders in the issuance of subprime and other mortgage-backed securities, rotten paper that was downgraded scores of times by Standard & Poor’s and Moody’s Investors Service. And Bush followed the counsel of Fed chairman Ben Bernanke, who was on board and at the helm as the Fed frothed up the real estate and mortgage bubbles to begin with.

Sincerely,
David Goyette

December 7, 2009

The Bailout Was a Wealth Transfer Scheme was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Where is the real bubble? Is it a bubble in commodities? Or a bubble in the people who buy them?

By the charts ye shall know them — bubbles, that is. The lines roll along nicely, calmly, along the bottom of the page, then all of a sudden, the line shoots up. When you see a chart like that, whether it is the price of tulip bulbs or shares in the South Sea Company, you know what will happen next. The line will go down!

What goes up must come down. A bubble is an extraordinary thing. And all extraordinary things tend to become less extraordinary over time. “Regression to the mean,” is what statisticians call it. The “mean” marks the territory that is normal. Whenever anything ventures into abnormal territory, chances are very high that it will soon come back on familiar ground.

Take an extraordinary person, for example. More than likely, his children and grandchildren will be more like everyone else than like him. It must be a terrible burden to be the son of an extraordinary man; people look at you like you were a dot-com stock in ‘99 — they expect something exceptional. Almost inevitably, they are disappointed.

Or take a Great Empire. What is an empire but an extraordinarily successful state? It stands out in history because it has managed to lord over its neighbors. Yet, what empire lasts? None…all regress to become commoners…ordinary nations.

Or take the weather. A rainy spell may last for a long time. But the more days it rains, the more dry days will be needed to bring the rainfall down to “normal” levels.

Regression to the mean is one of the surest bets an investor can make. Let prices go to extraordinary levels and he’s almost guaranteed that they will come back to normal. In markets, the regression to the mean principle is even more certain than it is in nature. Because extraordinary prices set in motion a series of actions and reactions that almost always bring them back in line. Highflying oil prices, for example, touched off a series of derriere-kicking trends and events.

On the supply side, the industry is spending 4 times as much on exploration and development than it did when the century began. The price of drilling equipment rentals has more than tripled. And now, believe it or not, a young man graduating from an Ivy-league college with a degree in petroleum engineering earns more money than a man who goes to Wall Street.

On the demand side too, changes are underway that cut the amount of oil used. The cure for high prices is high prices. Bubbles are self-correcting. The higher prices cause people to look for alternatives — or simply not use so much. US imports of oil went down over the last 12 years. And, for the first time ever, Americans were driving fewer miles.

Another track of the feedback loop is the economy itself. High oil prices work like higher interest rates or higher taxes — removing money from domestic commerce. The effect is to “cool” the economy…chilling demand for energy.

Elsewhere, substitutes for oil are being developed at breakneck speed — including wind, solar, and bio-fuels.

Regression to the mean works. Markets work. Lower energy prices seem a cinch.

But now we introduce an annoying fillip. While the bubble in oil prices was expanding…another, much bigger bubble was shaping up — and hardly anyone noticed.

Where? Just look in the mirror. At our own species. In the many, many thousands of years of our prehistory, we were hardly worth counting. There were tribes of us all over the globe…but they were small…barely holding their own against other species in the competition for food and resources. It took until about 1800 to get the population up to one billion. Worldwide. Then, man was a big winner. Numero Uno of creation. By 1930 another billion had been added. And another billion was added in the next 40 years. That brings us to about 1970, when the earth hosted about 3 billion two-legged yahoos. Since then, the population has more than doubled. The line shot up, in other words.

But we are a proud and egotistical race. As our numbers rise, we think the road will rise to meet us. What a shock it would be to find that the whole species was mean-reverting, just like everything else! What a surprise to find no road at all — that we are running off the edge of a cliff, like lemmings. More below…

Being in the right place at the right time is far more important than brains. Luck provides better investment returns than talent. Too bad. Because our luck seems to be running out.

George Soros has said the great credit expansion that was born with the baby boomers… and has lasted as long as we have… is now over. Not long after came word that the “end of abundance” is here too. That’s what it said on page 9 of the Financial Times. And then, Bo Diddley died. All the palmy trends of the boomer generation seem to be coming to an end.

Naturally, the world’s leaders were worried. They gathered in Rome that same week for the customary monkeyshines. Even Robert Mugabe — who is banned from traveling in Europe — put on a false mustache so he could dine out on the Via Veneto, leaving his lieutenants in Harare to beat and starve Zimbabwean voters. Poor Mugabe. Goebbels would have gotten a warmer reception at a meeting of Jewish orphans.

At 84, Mr. Mugabe is almost living proof of Haeckel’s biogenetic law. It maintains that the history of the individual rehearses the history of the species. In Mugabe’s long life, from prison cell to presidential palace, he is the history of revolution… a Kerensky and a Stalin… the liberation struggle’s saint and its monster, too… all in one. To black Africans he is a big disappointment. To whites he is proof that Ian Smith was right all along. When Ian Smith left the top man role in Rhodesia, the country was the ‘bread basket of Africa’ with a currency as strong as the pound. Now it is a basket case whose peoples’ bones stick out and whose dollars are already as worthless as a campaign promise.

But everything follows the same laws — from embryo to corpse… from boom to bust… from seed to fruit to rot… nothing escapes, neither an individual, an empire, a species, nor a market.

This is not the first time in our lifetimes that the world has seen this kind of show. In the ‘70s, Paul Ehrlich, like Malthus before him, foresaw a crowded, hungry world. In his popular book, “The Population Bomb,” he said hundreds of millions of people would starve to death. This was a world in which England couldn’t even exist; he said it would disappear by the year 2000. He was wrong about that. He was wrong about a lot of things. Julian Simon challenged him, arguing that a free economy always reduces real prices. On September 29th, 1980, the two made a famous bet — on whether the prices for 5 basic metals — chromium, copper, nickel, tin and tungsten — would actually go down, inflation adjusted, in the following ten years — despite population growth. What happened? Simon won. On the 29th of September, 1990, the prices of all 5 were lower. Ehrlich settled up with a check for $576.07.

In theory, Simon will always win a bet like that; competition and technology always force prices down. But Ehrlich wasn’t wrong about everything. And Simon wasn’t right about everything. While one believed the weight of numbers would send the world to Hell… the other had a god-like faith that the market would always save it, guided by an invisible hand to progress and prosperity. But while Simon is right in theory, the invisible hand is not always the gentle paw that he imagines; it does not necessarily call out for more booze just because the crowd gets thirsty. In fact, sometimes it vanishes altogether, allowing a Mugabe to ruin a country… instead of permitting the free market to build it up.

Simon had the good luck to make his bet at the beginning of a major decline in commodity prices. Oil, for example, hit an all-time high over $100 a barrel, in current dollars, in December 1979. Ten years later, it was trading near $30. And by 1998, the price had fallen to $10. Had he made his bet ten years earlier or ten years later, he probably would have lost.

Back to the raw facts facing the Roman holidaymakers: Over their plates of crespelle all fiorentina, delegates will learn that high food prices are putting millions of people on the verge of starvation. Then, as they wash down their peposo with a tide of Barolo or Chianti Classico, they will reflect on how this came to be. The “green revolution,” someone will mention, seems to have run its course. (Out of politeness or imbecility, no one will mention the Fed’s easy money policies.) Ehrlich’s population bomb never exploded, they might come to believe, because irrigation, selective breeding, and the use of petroleum-based products greatly improved farm productivity.

But now, the green revolution has turned brown. It is as mature as the credit cycle… or Robert Mugabe himself. The water is running out. Opposition to bio-engineering is growing. And petro-chemical inputs are both less effective and much more expensive than they used to be. Result? In 1961, crop yields grew by 10% per year. Lately, they’ve increased less than 1% per year.

Meanwhile, in 1970, there was about 1 acre of arable land on the surface of the planet for every pair of feet. But the feet have multiplied — just like Erhlich said they would — from a bit over 3 billion people to more than 6 billion; and now the species is expanding like sub-prime debt. Just look at a chart. Human population looks just like the Nasdaq in ‘99 or oil in ‘08. This bubble-like population explosion, along with urbanization, highways, pollution, desertification and so forth, has cut the amount of farmland per person in half. Meanwhile, the number of people bellying up to the bar continues to grow by 11% per year — more than 10 times faster than crop yields.

Everyone wants a drink; but there’s only so much beer on tap. Who knows? This may be a good time to short the whole damned race.

Regards,
Bill Bonner

November 19, 2009

Editor’s Note: This article originally appeared in The Daily Reckoning as “Boomer Trends Coming to an End.” To view the original article, please click here.

Human Population Bubble and Regression to the Mean was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

“This one will be no exception,” we remember thinking before the carnage got underway. But, of course, it’s not the certainties that make life interesting; it’s the uncertainties—the known unknowns and the unknown unknowns, as Mr. Rumsfeld said. We are all born of woman and end up where all men born of women end up—dead. But that doesn’t mean we can’t have some fun between baptism and last rites.

The worldwide financial bubble we faced was both worldlier, and more financial than any in history.

And, in the summer of 2007, it was still very much alive. So much alive that the media could hardly keep up with it. Forbes magazine, for example, tried to estimate the wealth of the world’s richest people. But the rich don’t typically give out their balance sheets, telephone numbers, and home addresses. So, there’s a fair amount of guesswork in the calculations.

When it came to guesstimating the net worth of Stephen Schwarzman, founder of Blackstone, the Forbes crew wandered off into fiction. They put his wealth at about $2 billion. Recent filings in connection with the new Blackstone IPO show he earned that much in a single year!

In that phase of the bubble, it is as if your neighbors were throwing a wild party and you weren’t invited. You detest them…envy them…and want to join them, all at once. A very small part of the population is having a ball; everyone else is getting restless and wondering when the noise will stop.

Meanwhile, the experts, commentators, kibitzers, and analysts were saying that there is a whole new phase of the giant bubble about to unfold; things could get a whole lot crazier. Even many of our respected colleagues were pointing to a text by the great Austrian economist, Ludwig von Mises, for a clue. What we have here, they say, is what Mises described as a “Crack-Up Boom.”

Before we go on, readers should be aware that the “Austrian school” of economics is probably the best theory about the way the world works. Like our newsletter, The Daily Reckoning, it is suspicious of efforts to control the natural workings of an economy, in general…and suspicious of central banking, in particular. The fact that it was a one-time “Austrian,” Alan Greenspan, who became the most celebrated central banker in history, only increases our suspicions. He was able to master central banking, we imagine, because he understood what it really is—a swindle.

What Is a “Crack-Up Boom?”

Von Mises:

This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.

But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against ‘real’ goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.

Mises is describing the lunatic phases of a classic inflationary cycle.

At first, no one can tell the difference between a real dollar—one that is earned, saved, invested or spent—and one that just came off the printing presses. They figure that the new dollar is as good as the old one. And then, prices rise…and people don’t know what to make of it. Later, they begin to catch on…and all Hell breaks loose.

You see, if you could really get rich by printing more currency, Zimbabweans would all be as rich as Midas, since the Mugabe government runs the presses night and day.

Von Mises died in 1973—long before this boom really got going—let alone cracked up. He may never have heard of a hedge fund…or even a derivative, for that matter. A world money system without gold? He probably couldn’t have imagined it. People spending millions of dollars for a Warhol? Twenty million for a house in Mayfair? Chinese stocks at 40 times earnings? He would have chuckled in disbelief. He understood how national currency bubbles expand and how they pop, but he probably never would have imagined how insane things could get when you have a whole world monetary system in bubble mode.

He’d have recognized the beginning of this bubble…and he’d have recognized the end, but the middle…or the beginning of the end – that would have dumbfounded him. During his lifetime he saw a Crack Up Boom in Germany in the ’20s…and a few more here…but he never saw a worldwide Crack Up Boom.

No one, anywhere, has ever seen a worldwide Crack Up Boom. We’re the first, ever. Pretty exciting, huh?

Regards,
Bill Bonner

August 7, 2009

The Worldwide Crack-Up Boom was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Yes, dear reader, the most volatile market in recent history could easily point its finger at a trader’s biology.

The conclusion will surprise you. The longer a trader’s ring finger, the more money he’ll make in the City (this study comes from across the pond in London, where top earners took home over $4 million – until just recently).  They measured the men up, and looked at their previous 20 months of P&L (profit and loss statements).  They also saw how long they’d lasted in the City.

Those with the longest fourth digit made over five times the money of their less-well endowed colleagues.  The average salary was $537k.  The long-ring group netted a healthy $828k, while the shorties had to make do with $145k.

OK, OK.  I bet you’re saying: what’s a couple of inches of bone and flesh gonna tell us about hormones?

Don’t know diddly about Darwin?  Think it’s just about DNA?  The real work of evolution starts with hormones. And the reminder of some serious prenatal hormonal action lies in the ring finger.

The Finger of Destiny: High-Stakes Day Trader or Value Investor

Measures are always relative to something. In this case, it’s the second digit: — the index finger.  They call this indicator the 2D:4D. This ratio is set before birth and stays with us throughout life.  Those with the longer fourth digit relative to the second often display rapid-fire execution ability. (See also: aggression, fertility, confidence, and sporting ability).

http://news.bbc.co.uk/1/hi/sci/tech/695142.stm

The accidental in utero testosterone junkie may well be set for high-stakes finance on the trading floor, simply because the developing brain becomes wired with a greater sensitivity to testosterone’s effects.

But before you run to get a ruler, let’s take a further look at what these 44 well-measured men reveal about the evolutionary life of Wall Street.

Testosterone, Cortisol & Your Next Investment

Coates, now Senior Research Fellow in Neuroscience and Finance at Cambridge, got a hunch while running a trading desk on Wall Street during the “dotcom” bubble.  He worked elbow-to-elbow with traders, when he noticed the change in traders’ behavior from pre-bubble methods.

Coates began to suspect a chemical was involved.  Just like Diane Fosse in the Rwandan jungle, Coates observed testosterone-related dynamics…even if the “competition” was between a trader at Goldman Sachs on 85 Broad Street and one working on the same trade, thanks to electronic trading, for Merrill Lynch halfway round the globe in Seoul.

The “winner effect” works like this.  Take two males in competition.  Testosterone rises.  They spar.  The winner comes out with even more testosterone and takes on a new opponent, while the loser skulks off with less testosterone.  Repeat.  And repeat.

Now for the end game (looking a lot like, say, former Lehman Brothers’ alpha wolf, Dick Fuld): the males, seething with testosterone, become overconfident.  Most importantly, they have increased appetite for risk.  They patrol areas that are too large (viz. commercial and residential real estate) and they pick too many fights (anyone starting another mortgage-backed securities pool in 2007).

So Coates remarked in the dotcom bubble and so we stand today.  The fact is, the dotcom bubble didn’t weed out anyone on Wall Street, because Manhattan Island is not a pure “Darwinian” island.  Instead, everyone just got shuffled around from investment bank to investment bank.  Top brass protected their own, sitting on each other’s boards and securing the “alpha wolf” salary and bonus.

And, sure, fast action juiced by higher levels of testosterone, is more likely to turn a profit — an abnormally large one at that.  But there’s one catch: cortisol.

Cortisol, a stress hormone, is seething in global traders everywhere…it comes when there’s the crash.  It’s the “fight-or-flight” friend that raises blood pressure, increases immunity, desensitizes us to pain. How does that translate into finance?  Cortisol renders the trader price-insensitive.  Monetary policy won’t matter.  He’ll see risk everywhere.

That’s because, long-term, exposure to cortisol ravages mind and body.  It affects memory recall — handicapping judgment with the shackle of fear — whether justified or no.  Like a kid who touches a stovetop for the first time, so is the trader who fears jumping back in the game that just burned him.

Is it time to fire all of Goldman’s males and change the name to Goldwoman?  The reason, in fact, Coates zeroed in on the testosterone test, was that the few female colleagues on the floor, he said, did not display the same behavior. Tellingly, the woman’s 2D:4D is almost equal and she has about 1/10 the testosterone of a man.  But she’s still got to contend with cortisol.  So the Wall Street ecosystem will remain chained to biological reflexes whose usefulness we may or may not have outlived.

Next Time You Hire: Measure Your Money Manager’s Index Finger

Here’s one more reciprocal fact.  A reverse advantage falls to those whose 2D is longer than their 4D.  It concerns a long-term market approach.

Taking a look at average finger ratios in university departments showed that the math, science and engineering-focused sport a longer index.  As you might guess it also suggest higher exposure to the opposite of testosterone – estrogen – in utero.  Estrogen helps the right side of the brain develop: good for honing sharp analytical skills.

Perhaps Mr. Madoff’s clients could have checked his pointer finger first, and those of his Florida club-hopping, dupe-hunting reps. But maybe we’d be surprised to find lengthy index fingers there…after all, the scheme was a “long-term” approach.

Most interesting of all, is that Madoff’s own sons and heirs cut short dad’s survival on the Wall Street three-ring menagerie.  He revealed the root of their inheritance, and they turned him in.  This positively Greek development in finance deserves the ushering in of the Furies from the wings.

Regards,
Sam Buker

January 23, 2009

Risk-Taking Traders Born Not Made was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.