Flutterby™! : Former NASDAQ director arrested

Former NASDAQ chair Bernard L. Madoff was arrested on a securities fraud charge Thursday for running "basically, a giant Ponzi scheme." (his words, apparently). Oddly, the charges apparently have nothing to do with his experiences at NASDAQ, though you'd think that'd be prosecutable, but with a private investment advising business that, according to this article, had $17.1 billion in assets under investment, but somehow he'd managed to blow through at least $50 billion, and on Wednesday he fessed up to his employees.

I've been wondering recently about how people fall for scam artists like this, why they seem to take the symbol, the suit, the tie, the smile and the firm handshake, over the obvious notion that, hey, the guy's a stockbroker, of course he's out to screw you over hard.

I was recently talking with a guy who, being Mormon, has put a lot of effort into having 2 years of food put by. We talked for a bit, and came to the conclusion that 2 years without food is probably a 500 year event, so eight or ten generations could come and go with that being a basic economic drain on a culture, but if you need it, then that's the culture that'll survive longer term. Maybe stockbrokering is that same thing in reverse, if it's 80 years between systemic collapses (and it didn't used to be, in the 1800s this was every 15 years or so), you can hope that your generation is the one that doesn't lose in the Ponzi scheme...