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This guy’s site will interest some - not exclusively about Madoff, a financial writer PO’d about the whole sorry big picture:

http://market-ticker.denninger.net/authors/2-Karl-Denninger

Calling Out The Excuse-Makers

Let’s start with Bill Gross:

“Still, while such a transformation is, to put it mildly, undesirable, the policies are necessary. As outlined in these pages, the U.S. and many of its G-7 counterparts over the past 25 years have become more and more dependent on asset appreciation. Under the policy-endorsed cover of technology and somewhat faux increases in financial productivity, we became a nation that specialized in the making of paper instead of things, and it fell to Wall Street to invent ever more clever ways to securitize assets, and the job of Main Street to “equitize” or, in reality, to borrow more and more money off of them. What was not well recognized was that these policies were hollowing, self-destructive, and ultimately destined to be exposed for what they always were: Ponzi schemes, whose ultimate payoffs were dependent on the inclusion of more and more players and the production of more and more paper. Bernie Madoff?

...

But Madoff’s scheme has a host of culpable look-alikes and one has only to begin with the mortgage market to understand the similarities. Option ARMs or Pick-A-Pay home loans allowed homeowners to make monthly payments that were so small they did not even cover their interest charges. Two million mortgagees either chose or were sold this Ponzi/Madoff form of skullduggery, believing that home prices never go down and that shoppers never drop. One can add to this the trillions in home equity/second mortgage loans that extracted “savings” in order to promote current instead of future consumption, and one begins to realize that Bernie Madoff and our cartoon’s Wimpy had company all these years.”

....

What about the shabby performance of the rating agencies? Were they not equally at fault for perpetrating a giant charade that was bound to end in tears? Of course: Aaa subprimes structured like a house of straw; Aaa monoline insurers built like a house of sticks; Aaa credits like AIG, FNMA, and FHLMC where only a huff and a puff could expose them for what they were – levered structures dependent upon asset price appreciation for their survival. Ponzi finance.

I will go on. Municipalities with begging bowls now extended for over a trillion of Federal taxpayer dollars, based their budgets and their own handouts on the perpetual rise in home prices, the inevitable upward slope of sales taxes, and the never-ending increase in employment and personal income taxes. To add injury to insult, they conveniently “balanced” their books with a host of accounting tricks that Bernie Madoff could never have come up with in his wildest imagination. Now, with cash flow insufficient to meet current outflows, they are proving my point that we have met Mr. Ponzi and he is us – all of us: auto companies that siphoned sales dollars to make labor peace instead of research and design expenditures; hedge funds that preposterously billed investors for 2% and 20% of nothing; a President and politicians who thought they could fight a phony war for free and distract the nation’s attention from $40 trillion of future social security and health care liabilities. Ponzi, Ponzi, Ponzi.

Ah. Someone’s been reading The Ticker, specifically “We’re all Madoff”.

But this begs the question - what does Bill Gross think we should do? What, pray tell, should he do?

He answers that question:

“Still, future policymakers must confront the reality that is, not the one that should have been. And investors must do likewise, casting aside personal philosophies for a clear-headed view of the future horizon. PIMCO’s view is simple: shake hands with the government; make them your partner by acknowledging that their checkbook represents the largest and most potent source of buying power in 2009 and beyond. Anticipate, then buy what they buy, only do it first”

Find a way to cheat -n- bleat, then get in front and reap the profits of inside baseball?

Perhaps the point of “We’re All Madoff” wasn’t quite clear to Mr. Gross - or perhaps, he just doesn’t give a damn.

But Bill, unlike many of the people on the street who are starting to make noise about this in public, really does get it.

Read the full text. Or just the highlighted sections.

Ponzi.

But what is “Ponzi” Mr. Gross? It’s a felony isn’t it? Indeed, such schemes are illegal. And the indictments you level are wide-reaching, and, in my opinion, spot-on - if a bit late.

Nor is Mr. Gross alone today; we also have this from Comstock funds:

“By now it must be clear to everyone that the U.S. economy is dependent upon DEBT, and we believe we have reached the debt limit!! It took the resurgence of the stock market bubble in 2003, just a few years after the late 1990s bubble, coupled with the housing bubble to get the private sector to feel wealthy or comfortable enough to generate the enormous debt relative to GDP that finally froze up the credit markets. As soon as the credit markets froze up earlier this year the economy came to a screeching halt as the consumer “hit the wall” and even solid businesses could no longer borrow money. “

Sure they can - if they don’t have too much debt. The problem is that most of them are up to their eyeballs.

At least Comstock gets the “how to get out” part - they say let the market force the defaults and the cleaning - in house prices, in assets generally.

They’re right.

Now, for those of you who I know are reading this, and are managing money but haven’t been part of pushing “The Great Ponzi”, I call upon you to do the right thing.

Let us all agree on the following facts:

Ponzi schemes are illegal. They are in fact felonies, and the people who engage in and profit from them are felons. Not-yet-prosecuted, perhaps, but the fact remains that none of these schemes are legal. None.

The law is clear in this regard. 18 USC 1341, for example, says:

“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anythin