now in default. He lost $50 billion of money entrusted to him.
from The Wall Street Journal
Dec. 15, 2008
Investigators dug through financial records at Bernard Madoff's investment firm as the list of victims of his alleged Ponzi scheme widened to include real-estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, Sen. Frank Lautenberg and a charity of movie director Steven Spielberg.
At Mr. Madoff's office in midtown Manhattan, guards have been positioned 24 hours a day. Investigators from the Federal Bureau of Investigation, Securities and Exchange Commission and the Financial Industry Regulatory Authority are trying to identify if any assets remain, a person familiar with the matter said.
In a Ponzi scheme, the initial suckers are paid generously in real money in order to create a flow of new money from additional suckers. Ponzi invented it and many others have perfected it. The Arizona Baptist Foundation went bust promising 15% returns and bilking Baptist individuals and congregations out of millions of dollars. That led to one teaching job for me, when a school went secular since it was bankrupt from the Baptist Foundation scheme.
Madoff was a founder of NASDAQ, but there were many obvious red flags about his scheme. One expert was trying to alarm people about Madoff ever since 1999. (I know the feeling.) No one did anything.
Foreign banks and many other institutions knew he could not give 12% on their money, year after year. The "smart" ones decided he was cheating with insider trading. Haha. He used the oldest con of all - join me in scamming the system, in breaking the law to make extra money.
Banks and hedge funds are going to tumble in the wake of this. Many socialites are going to discover they married for love, not for money. The Mets team owner and many players put an inordinate amount of cash in Madoff funds.
Many people suspect that the economy has not reached the bottom yet. My guess is that annuities, once scorned for being so staid, will become popular again.
Some church implications:
- More wealthy donors are going to be hit by the overall economic calamities.
- Endowment funds everywhere are going to be shrinking. Harvard lost $8 billion in value and the bleeding has not stopped.
- Seniors who give generously are hurting from their own losses. They will be unable to give even if they want to.
- Gifts of overpriced stock were a boon to charities. Now people are more likely to sell stock to decrease their tax burden.
WELS Financial News:
Our synod continues to wrestle with financial challenges. Through the month of November, synod spending has surpassed income by $1.3 million. Spending is in line with the budget, but a decline in support has resulted in the shortfall. It is expected that support will fall $3.7 million short of expenses by the end of the year. Cost containment measures will shrink the gap to $3.4 million.
CMO through November is $8.2 million, a decrease of $500,000 from the same time period last year. Individual gifts, Mission Partners gifts, Walking Together gifts and general support are all down from last year. Year of Jubilee offerings continue to be applied directly to the consolidated debt.