Madoff scandal hits Aspen

Money ^ | 12/22/2008 | Diane Tegmeyer

[Red in Blue PA]

ASPEN, Colo. (Fortune) -- Palm Beach and New York may have been hardest hit by the Bernard Madoff scandal, but residents in Aspen, Colo., are quietly tallying up massive losses.

The upscale resort community has a population base of under 6,000, but reports over the past week reveal that dozens of residents have been undone by the $50 billion Ponzi scheme allegedly perpetrated by Madoff.

According to local asset managers and lawyers, these families have lost upwards of $1 billion. Some have seen up to 95% of their life savings disappear in the past few days -- both long-time locals and part-timers are affected.

[ItisaReligionofPeace]

Your post is a bit incoherent, Ivy League or not.

[ovrtaxt]

Ahhhh, Aspen....

http://www.moviesoundscentral.com/sounds/dumb_and_dumber/dumb13.wav

[taildragger]

I get your post Johnny C.

If you did what you said you did, you gave your clients more downside insurance than even an annuity and they didn't want to hear it.

My gosh are they that greedy and unable to fathom risk?

Maybe they need to read Warick's "Searching for Alpha"?

[DB]

The age does matter.

If you are elderly you can't simply go get a job. You can't start a business, much less gamble with all that you have left to start a business that may well fail.

“Decent” is a relative term. A billion or so people would be really happy with a $5,000 annual income, so what. Would you be happy with that? Would you call it “decent” just because they would?

Stop taking this so personally.

[smallbiz]

“If you are elderly you can’t simply go get a job. You can’t start a business, much less gamble with all that you have left to start a business that may well fail.”

Get a job as a wal-mart greeter, and quit telling the poor they have to bailout the rich. If you are stupid enough to put 100% of your wealth with a high risk investment, you’re smart enough to work as a greeter at wal-mart.

[Arkinsaw]

The age does matter.

If you are elderly you can't simply go get a job. You can't start a business, much less gamble with all that you have left to start a business that may well fail.

My mother is 86. She has a modest teacher retirement. She lives in a modest house that they built themselves. She has a "decent" life. She has never seen $500,000 though.

“Decent” is a relative term. A billion or so people would be really happy with a $5,000 annual income, so what. Would you be happy with that? Would you call it “decent” just because they would?

There are many asset levels below $500,000 that I would call "decent". With the $25,000 base income you suggested....going to work at the US average wage would still put the guy $25,000 ahead of the average US wage. He should count his blessings that he has $500,000 in the bank. Most do not.

Stop taking this so personally.

I am merely pointing out that I IN NO WAY feel sorry for someone who had $20,000,000.....invested it very, very, poorly.....and still has $500,000 that most Americans do not have. There is zero sympathy there. The guy can go to work for the average US wage and do just fine with a life that the vast majority would consider "decent".

As for "decent" being a relative term....I am sure that George Soros would probably consider nearly everyone else's living "indecent". That sort of relativism means little to me, or most others. Take the $500,000 and be very happy you didn't foolishly lose it too.

[Malesherbes]

Putting Schadenfreude aside, there is probably a deeper message in this event.

[DB]

“... and quit telling the poor they have to bailout the rich.”

Reading comprehension a problem today?

Where in the hell did I ever suggest such a thing?

[Dinsdale]

Have you ever met anybody who has been rich their entire life?

No way on earth they can get a job earning the average wage.

These people are so obnoxious they have to pay their dogs to like them.

They will all try to sponge off other rich people! Guess what? Their former friends will treat them like the poor people they now are.

They will piss away their remaining assets.

Their idea of financial acumen was ‘never spend principle’! Now that’s not an option.

[Grampa Dave]

“My parents are down 50% on their retirement savings.”

This is the differination between those of us with IRA and/or 401k paper losses versus those, who lost everything via Bernie’s Ponzi Scheme or some other ponzi posing as a hedge fund.

We heard of one couple in a very exclusive locked gate community in a very exclusive community losing everything. My wife was asking what type of retirement plan would result in loss of everything. Well know we know.

Yesterday, I heard of another couple and a widow in the same community suffering total losses in their savings. Now I probably know how that happened.

[Arkinsaw]

No way on earth they can get a job earning the average wage.

I am not a class warrior. Rich people established a company that has provided me the opportunity to feed my family for 20 years and provide them health care and education.

But what I do oppose is the idea that it is shocking that wealthy people have been exposed to....gulp.....risk. There is a certain arrogance that no matter how bad it gets....some people still deserve big returns on whatever they do and somehow are supposed to be immune to risk and that it is a shocking tragedy when reality intrudes to end perpetual forever growth.

[smallbiz]

“Reading comprehension a problem today?”

I was referring to the people who invested 100% of their wealth into a high risk investment. If this includes you, when maybe the comprehension problem is yours. Please re-read your investment perspective... if you have anything left.

[Arkinsaw]

Also...there is a certain laziness to all this.

People with vast sums, and not much else to do, did not even take the time to properly manage the vast sums that kept them in style.

I mean, some of these had nothing else to do but travel and golf, yet couldn't even take the time to examine their own investments. Many just shoveled it off to the magic elf to do all the work. And not just parts of it....the whole kit and kaboodle put into a black box. I guess it is unseemly to delve into your own finances, or a pain.

From what I have seen, a LOT of people on Wall Street had doubts about Madoff. It's almost as if some of these people at his country club didn't even bother to do the minimum of checking before dumping billions on the guy.

[DB]

Well I hope you never have something of great value and lose it, either by misfortune or stupidity. So yes, I have some compassion for falling from so high so fast. I am blessed and have something to lose (not on the scale of the people from this article) but nonetheless it would be very painful to lose and I could. So forgive me if I have some sympathy for those that have lost much of their life’s work (some of these people did actually earn their wealth) by foolishly trusting someone that had been in “business” for twenty plus years.

That doesn't mean I think they deserve a single penny from the taxpayer.

[Dinsdale]

Unlikely that rich people established the company.

The founder likely got rich but also likely didn’t start that way.

The founder might have found rich investors though, but they didn’t establish anything.

People born rich are generally self important destroyers of wealth.

People that make themselves rich are the basis of our economy.

I still have no sympathy, but many of the born rich are unemployable even as WallMart greeters. Sucks to be them in situations like this.

[DB]

So in other words, you couldn't simply say “sorry, I was wasn't directing that at you”. Instead you have to try to deflect it and then add another conditional insult just to be safe.

You directed your comment directly at me the first time, not “other people who...”. And my only “high risk” investing in a 401k which I had to open in order to allow my employees to have 401k plans - not that that is any of your business.

[Arkinsaw]

Well I hope you never have something of great value and lose it, either by misfortune or stupidity.

I support four people on one modest income in a state where my employer is about the only place where I can be employed in my career choice. So I am, each day, at risk of losing a lot. Far less than $500,000...but everything to the four people I feed.

He should be glad he did not lose his $500,000 and has it in the bank. There are a lot sadder stories than his this Christmas.

[DB]

Well I'll definitely agree that there are far worse events happening this Christmas than this. I think that “$500,000” remaining is just a guess though. No one knows what if anything they'll get back from Madoff’s ponzy scheme. There may be some Federal SEC insurance involved that covers up to $250,000 if I remember correctly - assuming the fees were paid...

My only real point is we shouldn't be so gleeful when the “wealthy” fall. And just perhaps we should be a little sympathetic for those who actually earned their wealth crash and burn and that tomorrow it may be "us" and not “them”.

Merry Christmas.

[smallbiz]

First you wrote to me:
“Reading comprehension a problem today?”

Then you wrote to me:
“you couldn’t simply say “sorry, I was wasn’t directing that at you”. Instead you have to try to deflect it and then add another conditional insult just to be safe.”

Quit your bitching. I made a comment that was directed at the investors who lost money, and are now asking for government to use taxpayer money to make them whole again. I have a problem with that. If you want to defend an investor bailout, I will have a problem with you.

If your thin skin can’t handle that... tough $#!T

[Patriotic1]

I agree. Loss is loss, and I do feel sympathy for someone who loses their security (which is really what money is...), regardless of the amount.

My retirement savings have taken a hit. The person who doesn’t have any money saved for retirement would probably not feel sympathetic to me.

I do find many of the replies here to be somewhat astonishing.