The Madoff Whiners

TW: Completely agree with this Nocera piece. If it were up to me, Madoff would be drawn and quartered in Central Park. But, the whining from his investors is pathetic. Should some of the investors be pissed at their advisors who took a fee while doing lame diligence? Yes. Were they smug thinking they were in a "special" fund? Frequently. Many people have had their asses kicked in this market. Most of all they should be pissed at themselves. Nut up and move on.

From Joe Nocera at NYT:
"...Let’s dispense first with the idea that the S.E.C. should be reimbursing Madoff victims. Why? Government agencies make mistakes, treat people unfairly, and do all sorts of things we all wish they wouldn’t. But by law, the federal government cannot be sued when it carries out an unjust prosecution or, for that matter, when it fails to uncover a giant fraud. Government negligence led pretty directly to the recent financial crisis. Does that mean the feds should be reimbursing us for our stock market losses? Of course not. Because it’s not really the S.E.C. that would be paying out the money — it would be the taxpayers. Why should my tax dollars go to helping Madoff victims? This is not 9/11.

Besides, as I’ve argued before, the S.E.C.’s negligence notwithstanding, shouldn’t the Madoff victims have to bear at least some responsibility for their own gullibility? Mr. Madoff’s supposed results — those steady, positive returns quarter after blessed quarter — is a classic example of the old saw, “when something looks too good to be true, it probably is.” What’s more, most of the people investing with Mr. Madoff thought they had gotten in on something really special; there was a certain smugness that came with thinking they had a special, secret deal not available to everyone else. Of course, it turned they were right — they did have a special deal. It just wasn’t what they expected.

Outside the courthouse today, television reporters interviewed victims, all eager to tell their tales of woe. And their stories, in many cases, truly are heart-wrenching. Hopes and dreams have evaporated. Homes have been lost. Retirees are having to take minimum-wage jobs. Their anger at Mr. Madoff is understandable, to say the least. But to see them lash out at Irving Picard, the bankruptcy trustee, made me realize that too many of them still seem to think that someone should have to make them whole. The whole point about Ponzi schemes is that there is not enough money to make anybody whole — they were robbed, pure and simple, and the government is not in the business of reimbursing for robberies. Not even when the cops stumble across the robbers and then mistakenly let them go."
http://executivesuite.blogs.nytimes.com/2009/06/29/madoff-victims-get-over-it/