Trader’s Narrative

What a week! These are certainly interesting times we are living through. A bit too interesting for my taste. But we can’t do much about that.

Curious what massive redemption requests can do for a Ponzi scheme - something the SEC and the FBI were unable to do for decades. Madoff had all the blinking red lights you could ask for: a one person accounting team run out of a 13′ by 18′ office, no independent custodian, 1% a month like clockwork, etc.

Here’s a quote from an article in MAR/Hedge on Madoff, explaining his firm’s uncanny profitable strategy of “split conversions”:

…the split-strike conversion strategy is designed to work best in bull markets and, Madoff points out, until recently “we’ve really been in a bull market since ‘82, so this has been a good period to do this kind of stuff.”
Source

Darn right. In a bull market no one needs their money back. The only thing left is for the US government to propose a $50 billion bailout of Madoff’s firm. What’s a few more billion here and there among friends, right?

But we’re not in a bull market. We’ve entered into a unprecedented situation where everything is going down in tandem. Including gold, the supposedly “safe haven”. Well, to be accurate, not everything has gone down.

To find out the only thing that has gone up and to find other interesting links and stories, read on at news.tradersnarrative.com :

• Federal Reserve refuses disclosure request for $2 trillion
• which solitary asset class increased in value?
• Swiss central bank goes to 0.5%
• Madoff stuns Wall St. with biggest fraud
• why investors may have known and invested anyway with Madoff
• DojiSpace - a new free online scanning tool
• stocks with more cash than equity value - free future earnings

Inside Wall Street’s Madoff Scandal