Wilpon might not be broke afterall

Tom Tango points out that since Madoff had been paying dividends for a while and Wilpon was a long term investor, he might not be so screwed after all. Ponzi, or pyramid schemes, only really bone the last people to sign up before they collapse, so given how numerous portfolio's of various ilk lost 50% of their value or more in the recent global financial turmoil, Wilpon's Madoff investment may have even provided a greater rate of return then others. So don't look for the Wilpons to sell their stake in the Mets any time soon, or at least not because of the Madoff fraud anyway.

about 3 years ago kendynamo 6 comments 0 recs |

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Ponzi + Wilpon = WHAMMO!!!

The fact is that we have no idea how much Wilpon invested in Madoff’s scheme, how long he was investing, and whether he actually ever cashed anything out. The brilliance of Ponzi schemes is that investors are encouraged to keep their money in the scheme and actually invest more money than they had originally. Those who do cash out are offered incentives such as higher rates of “return” to reinvest their dividends, creating a vacuum of cash investments with very little in actual payout.

The scheme tends to fall apart when the SEC, IRS, etc. eventually try to identify the assets comprising those investments, of which there are obviously none.

by Eric Simon on Dec 16, 2008 6:17 PM EST reply actions

Lack of transparency of Madoff business. Facts:

The company made its own trades and held the shares it bought, unusual practices that kept its activities hidden from view.

Madoff, though a pioneer of electronic trading, also refused to provide clients online access to their accounts.

Madoff also avoided filing disclosures of its holdings with the SEC.

Source: http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121203970_2.html

IMO I highly doubt Fred Wilpon will even disclose how much (regardless of amount) of the money he may have lost. I don’t think he’s obligated to report losses, is he? So I imagine he’ll keep that little nugget to himself.

Greed + ignorance + Subprime + Credit Default Obligations + Wall Street + Banks + Fannie / Freddie + Federal Reserve =

" We got "The Rod"...What you got? "

by LOUtheMETandNATSfan on Dec 16, 2008 6:51 PM EST up reply actions

Was talking about this Saturday night

with a friend who works in the financial industry. He said that he’d always been doubtful of Madoff because the returns were always too high, always too good, and they never showed a loss. If there’s any truth to what he said, then there were lots of other people who felt the same way. Thanks for sharing your suspicions about him with everyone else, guys.

by BobbyV_Incognito on Dec 17, 2008 12:24 AM EST up reply actions