where did Madoff's money go?

Good question.

But doesn't the same question remain unanswered re. the squillions lost by all the banks. You can't have a loser without a winner...!

We've been round this before about Madoff. It was a Ponzi scheme.

Have you looked at the stock market recently? You'll find a lot more losers than winners!

Neb

Like with any Ponzi scheme, some of it went to the early investors so it looked like they were getting an excellent return.

You dont know that, he might have done worse than the average.

Bet plenty of it is stashed where the authoritys cant get it.

You can actually, most obviously when the stockmarket halves in value.

It was lent to people with no income, no jobs or assets, who spent the money and now can't afford to pay it back.

The people who received the money, ultimately Chinese factory workers, deposited this money back in the banks, and the banks lent it out again to the same people.

It went round this cycle many times, and every time, the amount of money in bank deposits got bigger, and the amount of debt owed by the NINJAs increased by the same amount.

Champagne & cavier. Plus a nice nest egg in Israeli banks.

If Madoff was not making trades at all (see below) he could not have lost the money in bad trades.

Madoff's fund may not have made a single trade

By Jason Szep Fri Jan 16, 2009

BOSTON (Reuters) - Bernie Madoff's investment fund may never have executed a single trade, industry officials say, suggesting detailed statements mailed to investors each month may have been an elaborate mirage in a $50 billion fraud.

An industry-run regulator for brokerage firms said on Thursday there was no record of Madoff's investment fund placing trades through his brokerage operation.

That means Madoff either placed trades through other brokerage firms, a move industry officials consider unlikely, or he was not executing trades at all.

it's sitting in banks in Israel

A lawyer for the trustee seeking to locate disgraced financier Bernard Madoff's assets for investors says more than $1 billion has been found.

It was a pyramid scam. The money paid out was the money paid in minus whatever Madoff used himself.

So the investors have most of the money. It's just that different investors ended up with it than those who originally parted with it.

FoFP

Such loans were generally for the purchase of (overpriced) houses. So the money went to the sellers of those overpriced houses.

Mebbe we should start a campaign to make them pay it back...

It'd be a fine piece of mischief, and under the circumstances, it might be quit popular.

-- Mike "Damn Exploitative House Sellers" Holmes

The reason the scheme collapsed is the same as it usually is with Ponzi schemes, people ask for their money back. Since the money they're "owed" is more than the money in the scheme if a significant proportion withdraw they take out more money than is in the account.

DO NOT GIVE THE POLITICIANS IDEAS!

The reason the scheme collapsed is the same as it usually is with Ponzi schemes, people ask for their money back. Since the money they're "owed" is more than the money in the scheme if a significant proportion withdraw they take out more money than is in the account.

----------------------------------------------------------------------------------------------

Ponzi schemes usually promise returns of several 100% pa, so it is easy for it to run out of money as soon as new investors can't be found.

Personally, I can't believe that a fund which paid "only slightly more than could have been achieved legally", would run out of funds in a few years just because of a dearth of new investors. Each individual investor could have been drip-fed their own capital investment and the funds would be good for about 15 years. There is no need to use new investors money to pay existing investors, so all this new money should still be there. If it isn't, something else must have happened to the money, IMHO.

tim

-- -------------------

Not if the "returns" are 11% a year. In 6-7 years it would be gone.

Not if the "returns" are 11% a year. In 6-7 years it would be gone.

-----------------------------------------------------------------------------------------------

You haven't added in the 5-6% he should have got legitimately (and at 11% the money will last 9 years, there's no compounding here as the "profit" is paid out, not reinvested)

tim

-- --------------------

What makes you think he invested any money? Even if he did he could have lost money on his trading.

What makes you think he invested any money? Even if he did he could have lost money on his trading.

----------------------------------------------------------------------------------------------------------

He had to do something with it. Yes, he could have lost money on his trading, but if he did that, there ought to be some records of those transactions.

I still don't believe that the new funds ended up in the hands of the historic investors as thier "interest". The sums don't add up.

tim

-- -------------------------------

My guess is that he has hidden the money around the world once he knew he was close to getting found out.