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Although I feel a great deal of sympathy for the investors who lost money investing with Bernard Madoff, I am outraged by their desire for the US Government to pay for their loses. In many cases, they want to be compensated for amounts in excess of the SIPC limits. While their losses are tragic, a bailout for them would signal that there is no risk with investments.
Sadly, fraud is a legitimate investment risk. From the Madoff fraud, we have learned the importance of due diligence, skepticism and diversification. An SIPC bailout would wipe away what we have learned.
1 comment:
Hi Guy,
I've blogged about this here. The bottom line is that this fraud is actually too-big-to-fail. Isn't that stupid?
Furthermore, the fairy-gold was spread around to a heck of a lot of politicians and political organizations of every stripe. The epicenter of the scandal was perhaps America's most intensely activist group of donors to causes of all sorts. When you think about it the ultimate destination for a lot of this fraudulent conveyance was Congress for heaven's sake.
The politicians who crack down on this scheme would be voting to cut off a far bit of their customary level of donations. Go figure :-(
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