I saw an interview with a retired couple who lost a million bucks ..... and I felt bad for them.

[Stinky The Clown]

I saw this on the CBS Morning Show this morning.

These were not people who I can imagine myself running with. They seemed exactly like a self-absorbed pair who would do what they did. They retired to West Palm Beach. I don't know people who retired to West Palm Beach. That said, they were maybe 10 years older than me and not unlike some of my neighbors, I guess.

Anyway, after they retired, they had shifted their investments to that guy from the stock exchange who was recently charged with $50M worth of fraud. This pair invested with him.

Now they are bankrupt and, they say, destitute.

Yeah, it is easy to say they wree greedy. It is easy to say they were stupid to let it all ride with one guy. Yeah, it is easy to say they finally get to live like so many others, on just Social Security. Yeah, yeah, yeah.

But they were victims of outright fraud.

They had their life savings stolen from them. They'll never get it back. No government protection. No nothing.

Destitute.

Just more victims of another Gordon Gekko type. Just two more people sucking at the teat of the dying legacy of St. Ronald.

Easy enough to say "fuck 'em".

But I can't. They're victims, too.






Imagine if they owned some small business. Maybe a restaurant .... or a dry cleaner. Or a gas station. One million bucks ain't really all **that** much. One can easily sell the small business one worked one's life to build for a million or more. It isn't that big a deal. These didn't strike me as lifelong 'haves'. They really seemed pretty ordinary. Except for their tale of woe.

Anyway, I felt sorry for them. I rail against the really rich all the time. I am happy to see a class war. But these two? They seemed like schlubs, really ...... just like the rest of us.

[bullimiami]

1. 50B worth of fraud

[Stinky The Clown]

2. Oy .... you're right.

[Tangerine LaBamba]

3. I read this today

It's the other side of the people you saw on TV. It's from the latest issue of Vanity Fair, and I thought it was stunning in its portrayal of the unbelievable greed that's behind so much of this economic meltdown. It's about the people who helped put your couple where they are today - in tragic circumstances.

http://www.vanityfair.com/magazine/2009/01/wall_street200901?printable=true¤tPage=all

I guess you can't trust anyone with your money, right?

[annabanana]

4. To be old AND poor in this Country is a terrible thing..

I don't wish it on anyone but Bush, Cheney, Rumsfeld, Addington, Wolfowitz, Gonzales, Rove, . . . . Oh, THEY know who they are.

It would be best, of course, if they were old, poor & incarcerated... But I'd take old & poor if I could get it...

[question everything]

5. And yet, and yet

how often do we hear the phrase that "if it sounds to good to be true it probably is?"

This was a fund that reported roughly 1% a month like clockwork, with nary a loss, for two decades. Why did that freakishly smooth return not set off alarms among current and prospective investors?

[Cleita]

6. Most of us have lost a lot.

We worked saved and invested our money, but it's not over. I believe it will get worse. I wish I had put my money into Euros a year or two ago, but I didn't because it was difficult to do with the kind of investment DH left me with. So I crossed my fingers and hoped for the best. At least those of us who are sixty five and over still have social security and Medicare unless Bush manages to fuck those programs up too before he leaves office. I have gone back to work part time, although I'm almost seventy, to make ends meet. But if through illness or forgetfulness, I won't be able to work anymore, I really don't know what will happen unless the Obama government fixes Medicare and gives seniors a meaningful cost of living increase on Social Security.

[Stinky The Clown]

9. I moved a part of my SEP-IRA into euro-based securities a few years ago.

It didn't help. It just delayed the process.

Nothing is safe, I'm afraid.

[Cleita]

14. That's what I was afraid of.

I thought of just putting what I had in a Money Market account but I don't think our dollars are safe from inflation either. The only way that the government can pay back the huge debt the Bush administration incurred is to print a lot of money with the result of devaluing it. The PNACers and Corporate welfare enablers, thoroughly squeezed every bit of wealth they could from the middle class and elderly successfully leaving no recourse whatever. Not even putting your money in the mattress will stop inflation. Young people can start over, but the only hope we elderly have is the hope that our government has compassion on us and provides us with adequate health care, shelter and pension money so that we don't die in a ditch somewhere.

[MercutioATC]

18. Better to lose 2% to inflation than 40% to the vagaries of the market.

I'm 100% in treasuries, making about 4%/year. I'm losing a little, but it's much better than the alternatives.

[Cleita]

21. I'm afraid it's going to be a lot more than that,

By the time we are done, it's going to be like Germany before the Nazis took over. It's going to take the ordinary working person's life savings to buy a sack of potatoes, well maybe not that bad, but bad enough.

[GoesTo11]

23. Obama's not magic, but he's good enough to stop that scenario

[MercutioATC]

24. I don't think it's going to get THAT bad.

Yes, we'll probably see low double-digit inflation, but the U.S. is not Zimbabwe...even with the Treasury printing money like Milton Brothers.

[Doremus]

35. I'm responding to your post but it's actually for anybody else in the same boat

Our annuity retirement account is in a (very conservative) equity fund. We've pretty much come to the conclusion that the bottom is still off in the distance.

We're looked into our options and have discovered we can do a trustee to trustee transfer into an IRA. With the trustees doing the transfer, as opposed to ourselves, we will avoid taxes and penalties and, should inflation take off and interest rates rise a la Reagan, hopefully one will offset the other.

Just mentioning in case anyone else might want to consider it.

[Mayberry Machiavelli]

7. I'm amazed at people like Madoff. If you were poor and desperate, I at least understand the impulse

to run a criminal scam.

I can even understand the compulsion to try and become rich if you WEREN'T in desperate straits.

However, if you were already quite rich, where you and your family would definitely live very comfortably for the rest of your lives, I don't understand why you'd do anything that could land you in jail, just for more money.

Especially something like a Ponzi scheme where it seems inevitable that it must collapse and be discovered.

I really wonder if it's just the thrill of getting over on people.

[madinmaryland]

11. GREED.

The rich seem to want to find any scheme to get richer. Stew Leonard owner of a hugely successful dairy market (revenues over 100million/year) still managed to find a way to skim money off of the hotdog stands at his stores to avoid paying taxes on that money. WHY when he was so wealthy would he try such a knuckleheaded scheme?

[SammyWinstonJack]

25. LIKE YOU SAID, GREED!

Why when he was so wealthy would he try such a knuckleheaded scheme?

Pure greed and he thinks he is entitled.

[Lydia Leftcoast]

37. I once read a comment to the effect that once you have enough money

to live in comfort, getting more becomes a game, with the score kept in the millions and billions.

[endarkenment]

8. People have had their savings stolen from them all over this country

and nobody has been charged with shit. So Madoff ran an unapproved scam and got nailed, at least his victims know somebody is getting charged with something and may get punished. The rest of us are just sitting here, with half of our retirement funds vanished, watching as those who were responsible get rewarded with billions, perhaps trillions of dollars from the federal government, trillions of our dollars that we will have to pay back.

When do we get our day in court?

[Stinky The Clown]

13. When do we get our day in court?

I keep flashing back to 18th century France.

I have a pitchfork in my garage. I have asked Santa for a torch to go with it.

I joke ...... mostly.

[Tansy_Gold]

10. Never "invest" what you can't afford to lose

And I put that "invest" in quotes because there are so many people who use the term when what they're really doing is speculating.

In my book, one invests when one is going for the slow steady and virtually guaranteed return that means security when one isn't going to be able to continue to earn wages. When one goes for the quick buck, the fat return, then one is speculating. I have very little sympathy for speculators.

Invested for the long haul, even in CDs at 1%, that million dollars would return $10,000/year. People who wanted to "invest" for a 10% return (which is what Madoff was claiming) wanted $100,000K per year. To me, given the current economy, that's greed. No sympathy.

And since I don't know how they "made" their money in the first place, I'm skeptical. Was it money they "made" from prior investments? Inheritance? Stock options? If they didn't earn it the old fashioned way, I have no sympathy for greed.



Tansy Gold, hard ass

[gravity]

16. Their money was flat out stolen

They didn't lose it because of a bad investment. They probably accepted that there would be some risk of lost, but not losing everything in a single day because of fraud.

[Tansy_Gold]

26. Yes, their money was stolen, and I'm not absolving Madoff of

anything.

What I'm saying is that I don't have a whole lot of sympathy for those who lost everything because their investment "strategy" was based on greed. They wanted the fat return and they put everything on that number on the wheel. If they lost it all to Madoff, partly it's because they gave it all to him without putting some of it somewhere safer but at lower return.

I doubt, too, that they're "destitute." Is their home in West Palm Beach paid for? If so, then they have a roof over their heads. Maybe they have to come up with the taxes and the upkeep, maybe even an HOA fee, but they have SOMETHING. They probably have social security, too. Maybe both of them do. They have SOMETHING.

There are one helluva lot of people out there who don't have anything, who are truly destitute. Some of them are right here on DU.

One of the delusions the rightwingers like to maintain in order to keep their followers in line is that taxes need to be kept low on the rich because "you too may be rich someday (ha ha fat fucking chance!) and you want to be able to keep it all, don't you?" Well, what I see here is that same kind of misplaced sympathy: Feeling sorry for the unfortunate rich (because secretly we hope to be among them pretty soon and we don't want the same tragedy to happen to us!).

The next step, of course, is to feel sooooooo sorry for them that we decide they -- and, by extension, ourselves if/when we become rich and then fleeced by a scam artist -- need a bailout.

I'm far more inclined to urge a bailout for people who can't afford to buy a home and so are renting one only the landlord isn't using the rent money to pay the mortgage and the renters are essentially foreclosed on. I'm far more inclined to have sympathy for the family that loses its breadwinner's health insurance because of a job loss and then faces bankruptcy over a medical emergency. I'm far more inclined to have sympathy for a UAW worker who is facing pressure to voluntary reduce her/his wages to bring them "in line with" the non-union worker whose pay is actually higher.

These people had a million dollars in one lump sum and we're feeling sorry for them. Well, one of us isn't.



Tansy Gold

(edit to correct location)

[gravity]

31. They didn't know that it was going to be a scam

Maybe they expected the SEC to do their damn jobs and that this type of shit couldn't occur. I just don't like this blame the victim mentality here. We have regulations to prevent this type of thing from occurring to protect the little guy.

Getting a highly reputable investor with a good track record to manage your account is not something out of the realm of being completely risky with your money. They were hoping for a return of 10%, and were getting statements in the mail every month for money they thought they have.

If they had their nest egg reduced by 50% because of risky investments, then there wouldn't be sympathy, but losing all the money that you spent your entire life saving because of a scam is just wrong.

[Cleita]

19. I can answer from what my husband and I did.

We saved in IRAs from our wages. We could only save $2,000 a year each. We put it into CD's There were some good years that the CD's paid good interest so principle built up. When we retired, we bought a trailer, our only big expense. We were renters so we never had a windfall from selling our home like many retirees. Even after we retired, we worked in exchange for hook-ups and rent in various camp grounds, both public and private. We only took income from the money we had saved. When my husband fell sick, we incurred thousands of dollars in health care because his private Social Security HMO wouldn't pay for anything because I couldn't phone them to get approval for an emergency when we were up in the woods on the Canadian border on a job incidentally. There was no cell phone service up there then. So we had to pay out helicopter med vac, emergency room, hospitalization, doctors, tests, MRIs and rehab out of pocket. I then learned my lesson as to what scum these privatized Medicare plans are. I switched to traditional Medicare after that. So that considerably lessened our nest egg. During the Clinton years, the interest on savings that we depended on for extra income kept going down thanks to Greenspan so we had to switch to riskier mutual funds that paid more income because by now we were having to pay rent.

Of course now with the stock market down where it is whatever I have left is a fraction of what we started out with. I wish I had known, I would have spent it on frivolities. I think the number of cruises, SPAs and vacations that I could have spent on what is gone all the while I sat up here in my trailer pinching pennies so I wouldn't spend what should have been the kid's inheritance.

[Winterblues]

12. Try as I might I can not feel much sorrow for millionaires that squandered their money

They could have bought bonds or stock in a local utility and collected dividends but no...they had to get greedy.

[gravity]

17. They were suppose to be invested in a diversified fund

There was nothing excessively risky about the investments that they were told to be invested in.

[alcibiades_mystery]

33. They were invested in a cult of personality

No sane person could take on e look at the way Madoff ran those operations and think that it was on the up-and-up. Only the greedy and the stupid, and mostly just the greedy.

[Waiting For Everyman]

15. I wonder how they voted since 1980?

I also wonder what they thought about the foreclosures for the last year to two years? People losing several hundred thousand in equity built up over a lifetime, when that's all the "assets" they had? Or the job outsourcing and layoffs? I wonder if they cared about this same kind of survival problems happening to a big chunk of our population? Single mothers or families or the elderly or disabled with utilities turned off, using space heaters and candles, having homes burn down from it? Starving or freezing in the streets as lots of veterans and others have for years.

What did they think about children going to school hungry in the USA? People dying for lack of basic medical care?

I wonder what they thought when talking heads like Larry Kudlow came on the tube, blaming the victims? Did they agree? Did they say how awful it is at their country clubs and card parties?

I'd be curious, but I'd make a heavy bet... and probably win it.

My point is, they were very likely part of the problem. They probably helped bring this misery to others and didn't care, as long as their portfolio went up. They like risk, they like speculating, as all "investors" do.

They got what they wanted. The other victims above had it forced on them - to pay for undeserved profits that went to...

[Stinky The Clown]

20. I view a lot through that same prism you use .... "how did they vote?"

But I came to a different conclusion with this couple. I saw them as naive more than greedy. Sure, they tried to increase their wealth. But the 'investments' they made would not jump out at anyone as being shady.

And as I said in my OP, a life savings of a million bucks plus a home is not all that much.

Much more than me, for sure. Probably much more than you. But still not one bit unusual. As I said, many small businesses - even mom and pops - can be worth a million after a lifetime of working at it.

I don't quarrel with your rant. I just see it as a bit out of place in this particular thread.

[Moose4Biden]

22. I find your assessment a bit harsh

My dad lives in West Palm Beach, Florida. He lives in a gated golf community, eats at the clubhouse, and drives an SUV. He's trying to make enough money to retire comfortably.

That doesn't make him a bad person. He volunteers for his local congressman (a democrat - despite the SUV, my dad's always been an environmentalist) and he worked for Obama. He does care about starving children and the neglected sick, but like many men who had their fathers die in their early teens, my dad's life has revolved around trying to make a success out of himself.

About 10 years ago, he got scammed out of a huge chunk of his savings by someone he trusted and had known for a few years. It wasn't the first time my dad got burned, but it was the most personal. My father isn't the greatest business mind in the world, but he isn't a rube - he's started into deals before, then pulled out when he realized that they stank. However, he loves to deal, and I worry that as he gets older and loses some of his sharpness that he'd be an easy victim.

Florida is the land of the sharks. People move down there with their savings, and are immediately hounded by con men and their scams. I feel bad for anyone taken by those scams. And I don't care if they attend parties at the country club. Their lifestyle is their business, and if people try to live like the neuvou-riche, it doesn't make them bad people. And if they do happen to be rich, (and in West Palm, having 1M saved for retirement does not qualify one as rich) that doesn't mean they blame the nation's problems on the victims. You're making some very big, very cruel assumptions about people you don't know.

[Waiting For Everyman]

29. It isn't the country club, it's the RW economics and its tactics - being ok with that.

Did people like this never wonder what was generating these "returns" for them? No, I guess not. And that's supposed to be ok. Thing is though, it isn't ok. Those who profited from it, took part in it. That it was anonymously doesn't make it different.

Just pointing out, you don't know that these people are like your Dad either.

I'm only look at their acts. And what their acts were part of. I'm describing what was on the other side of those acts, which nobody wanted to know about.

People are so quick to blame the subprime borrowers, but do they also blame the subprime profiters?

For every dollar of increase, there was a dollar of loss somewhere. Guess where it was? That didn't bother anybody (and still doesn't), and that's what bothers ME.

[Moose4Biden]

40. ?

Am I missing something? What were their acts? According to the original post, the only act I saw was them getting taken by some shyster. I didn't see anything about subprime profits.

Anyway, if I don't know if these people are or aren't like my dad, I will always give the benefit of the doubt. When I don't have any evidence to prove otherwise, I will always assume that people are decent.

[earth mom]

27. I usually have loads of compassion for people-but I find it hard to drum up sympathy for greedy

people-no matter how nice they seem-to whom a million dollars is not enough.

Because the bottom line is that the millions & billions of dollars that have been made by the rich in this country have come at a HUGE price to the masses of people they exploited to gain that wealth.

[Obamarama]

28. I have zero sympathy for them....

Who did they have to climb over.....who did they have to fuck over.....who did they have to screw over to accumulate $50 million dollars?

I'm sorry, but they should be lucky they aren't living in 18th century France or else their heads would have been gone weeks ago. I think many people of this country are getting sick and tired of the wealthy who claim they're experiencing tough times, too. They should be thankful guillotines have gone to the wayside, because there's an increasingly palpable anger bubbling up through the populace of this country.

[Stinky The Clown]

30. You fail reading comprehension

They were worth (and lost) just under ONE million. Not fifty.

Fifty million would not have elicited this thread from me.

[MadHound]

32. Read for comprehension next time instead

They lost one million, not fifty.

I know a fair number of people like this who worked hard all their life, stashed it away, and now have a nice nest egg. They live off the interest, which gives them a tidy $50,000/year income. They donate to charities, help their kids and grandkids. No, they're not rich, they didn't fuck people over to get their money. They normally live a middle class/upper middle class lifestyle.

Now these people are screwed, and some people here are cheering:puke: What's worse is people are cheering this on, even though they don't know who these people are, what they did. They simply see those six zeros and automatically assume that they're eeeeevil rich folks. Sad, really, pathetic.

[Obamarama]

36. My bad...misread the original story. One million isn't that much these days for retirement...

That totally changes the perspective. I stand guilty of not carefully reading the article and only scanning it.

[eridani]

34. Yes, they are victims.

I feel much more for people who never had it at all, however.

[Greyhound]

38. "You can't cheat an honest man" - W.C. Fields

Every con requires the mark to believe they can get something for nothing. Madoff knew where the money was and how to entice those that stole it in the first place.

[mrreowwr_kittty]

39. They are victims. As are many of the people who got suckered into ARMs.

Yet you have a lot of people, even here on DU, who heap scorn on them.

We are supposed to be able to trust the advice of people who are given licenses to handle our money. That's the whole point of giving them those licenses. Somehow we've become a country where the average person is supposed to be the expert and the so-called experts are off the hook for any kind of accountability.