The Bernie Madoff Ponzi scheme is swelling and growing in the corner and no-one really wants to think about it. Madoff, a former chair of the NASDAQ board, has been running a scam whereby existing investors are paid with the funds of new investors (the Ponzi name comes from the only episode of Happy Days ever directed by Almodovar, in which Potsy and the Fonz had an affair, and treated Mr Cunningham as their giant baby). Nothing new, except the size of Madoff's scheme -- $75 billion -- which is enough to throw a fresh wobble into the financial system's shaky orbit, and add to the sense that no figure, valuation, price etc can be trusted.
Wednesday, December 17, 2008
Guy Rundle in today's Crikey (subscription only) explains the etymology of the Ponzi scheme:
Monday, December 15, 2008
Kate Jennings, Australian ex-pat and author of Moral Hazard and the latest Quarterly Essay, appeared on ABC Radio's Counterpoint show last week to give some insight into the GFC -- Global Financial Crises -- and those WMD also known as financial derivatives. Obviously with her ear to the ground still in Wall Street circles Jennings reported that CDS -- credit default swaps -- are also known, colloquially, as cold dog shit.