From the NYTimes:
But on Friday, less than 24 hours after this prominent Wall Street figure was arrested on charges connected with what authorities portrayed as the biggest Ponzi scheme in financial history, hard questions began to be raised about whether Mr. Madoff acted alone and why his suspected con game was not uncovered sooner.
As investors from Palm Beach to New York to London counted their losses on Friday in what Mr. Madoff himself described as a $50 billion fraud, federal authorities took control of what remained of his firm and began to pore over its books.
But some investors said they had questioned Mr. Madoff’s supposed investment prowess years ago, pointing to his unnaturally steady returns, his vague investment strategy and the obscure accounting firm that audited his books.
Now thousands, possibly tens of thousands, of investors confront losses that range from serious to devastating. Some families said on Friday that they believed they had lost all their savings. A charity in Massachusetts said it had lost essentially its entire endowment and would have to close.
According to an affidavit sworn out by federal agents, Mr. Madoff himself said the fraud had totaled approximately $50 billion, a figure that would dwarf any previous financial fraud.
At first, the figure seemed impossibly large. But as the reports of losses mounted on Friday, the $50 billion figure looked increasingly plausible. One hedge fund advisory firm alone, Fairfield Greenwich Group, said on Friday that its clients had invested $7.5 billion with Mr. Madoff.
I find it very interesting and coincidental that this is just about the same figure, or even more, that was being bandied about to help save the domestic automobile manufacturing industry. That’s a topic for another post, of course. But this one is just staggering, especially coming on the heels of all the bailouts on Wall Street and the out of control governor of Illinois.
It really is beginning to seem as if there is not a single honest person who controls the power and wealth of this country. All of them are out to get as much as they can for themselves, without regard to what happens to anyone else. Now, of course, this is a vast oversimplification. There are many honest, hard working people out there. But it is getting increasingly difficult to emotionally believe that. It really is beginning to feel like the entire “ruling elite” of this country (both political and corporate) are a bunch of bald faced lying thieves.
I can only hope that this absolute deluge of bad news recently causes the entire country to rethink how things have been done in the last 15 years or so. Regulation and oversight are not evil; they are absolute necessities. There is an old saying (I can’t remember the attribution right now) that goes something like, “Great powers are not destroyed from the outside until the are destroyed from within.” Unfortunately, that is what I think is going on right now in the country. Unless we do something to reverse this trend, the history of the United States of America is going to be documented in books and placed on the library shelves, right next to “The Rise and Fall of the Roman Empire.”