Comments on: Shaky foundations & Bernard Madoff

By: Dipping a Toe in the Black Stuff | Green Stocks

Dipping a Toe in the Black Stuff | Green Stocks — Fri, 06 Feb 2009 21:23:21 +0000

[...] of our investments, not just about how much money we’re likely to make (or lose.) Many former Madoff investors will now agree. If I lose money on this speculation, I will not only feel the loss financially, I will also [...]

By: darren toth

darren toth — Tue, 30 Dec 2008 19:24:39 +0000

It is true, you don’t have to be smart to be rich. I personally feel that what has happened to our economy is that the people in charge of managing money are better at politics than economics. My wife works for a very well known health care giant in Los Angeles, and the amount of waste, opulence and incompetence is staggering. The sense of entitlement on the executive level is amazing; for example, my wife told me about one particular consultant claiming $24,000 in expenses for a single month.
The myth is that the wealthy have gotten to where they are by smarts and savvy. The reality, many times, is that the CEOs, CFOs, etc, are just people who put their time in, and get lazy when it comes to watching where and how they spend their organization’s funds. Enter guys like Madoff who capitalize on people’s trust of the system. It isn’t so much that our economy is failing, its just that the executives have become accustom to being paid so highly, and in reality, if your business is failing, you are being paid for doing absolutely nothing.
I don’t blame Madoff. He screwed a bunch of people who’s job it is to make sure they don’t get screwed over.

By: vivian greene

vivian greene — Mon, 29 Dec 2008 20:27:46 +0000

I founded a company called Invest in Love inc because that is the best investment. I learned, quite innocently as a syndicated cartoonist that my designs were licensed to companies that exploited others – child slavery, for example.I withdrew my rights, gave up lots of money, but decided I would work with people who were aligned with my vision.

People are not dumb. They are unaware. They don’t know that a child of 5 works in 115 degree heat from sunrise to sunset picking coffeee beans for their morning coffee – often with a 4000% mark up. They don’t really know where their investment dollars, their tax dollars, their banked dollars go.

Who is to blame? Who can change this? It is the same with investments. And believe me, it is not easy – with my 30 years of marketing and business savvy – to get a straight answer.

It’s like a man courting a pretty lady. He’ll say anything to get what he wants. Corporations,Investment Opportunities, many big Bad Wolves will take our money for purposes, they too, may not realize.

Usurious bank practices are all over the internet. Everyone who has a bank account, a cell phone, an internet provider, has suffered an “overcharge” or “oversight?”

Do you stop dealing with such companies? Ever just cut that credit card in half?

I think it begins with us. Take some personal responsibility. There’s an old adage: “Take care of the pennies and the dollars will take care of themselves.”

Giving is the highest expression of our power. It is more than writing a check. It’s the involvement and caring to steward that money for good.

By: cv harquail

cv harquail — Mon, 29 Dec 2008 16:38:16 +0000

Hi Marc-
This is a neat insight into the fallout of the Madoff scandal, showing how it is a certain kind of common organizational oversight — or actually, lack of oversight — that led these Jewish organizations to invest in ways that ultimately damaged both their financial security and their pursuit of their missions.

Another way to phrase the question you raise is “Why are organizations so focused on the ‘output’ that they ignore their ‘input’?” Or, why don’t these organizations pay attention to where they invest their capital as part of their mission? There is enough information now about activist investing that organizations can put their own money behind their missions *while* being financially savvy. (I.e., you don’t have to accept significantly lower returns in order to invest in a mission-appropriate way.)

One issue with the Madoff investors is that many of them used membership in the shared New Orthodox Jewish community (as reported in the NYTimes) as a substitute for due dilligence. So they paid attention in a superficial way to with “whom” they were investing. Better would have been to pay attention to “in what” they were investing.

If more organizations paid attention to where they kept their own money, they could double the power behind their missions. Instead, alas, much missed opportunity and loss.

By: Tom Konrad

Tom Konrad — Mon, 29 Dec 2008 03:44:37 +0000

Great points, Marc… I wish I had made them myself.

One thing I’d change, though: instead of your first line “How could smart people be so dumb?” it might be better to ask “How could rich people be so dumb?”

Part of our financial problems these days comes from the cultural assumtion that rich = smart. Maybe Madoff will help us learn the lesson that the two are very different things… But it’s probably too much to hope for. If Long Term Capital Management did not teach us that smart and rich are not the same thing back in 1998, then why should Madoff in 2008?