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To: TigerLikesRooster
Madoff himself saying—"basically, a giant Ponzi scheme"

Giving the bogus business of AIG, "basically" another "Ponzi Scheme", one could apply this to all that do business there.

5 posted on 12/13/2008 4:19:07 AM PST by org.whodat (Conservatives don't vote for Bailouts for Super-Rich Bankers! Republicans do!)
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To: org.whodat

Re AIG as a Ponzi scheme:

That’s not quite correct. In a Ponzi scheme, the schemer uses the incoming funds to payoff early investors (and usually diverts some to himself).

The thing that brought down AIG was a bit different. They wrote insurance that they couldn’t cover. It’s like sitting down at a poker game, showing your wad which is really a stack of play money with $100 bills on each side, and betting. If no one finds out, you can walk away with your winnings, but you have to welsh on your bets if you lose. Its a different kind of theft, because a welsher is establishing an option on the pot, which has value. He can’t lose (he doesn’t have any money), but he can win.


22 posted on 12/13/2008 7:04:31 AM PST by Pearls Before Swine (Is /sarc really necessary?)
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