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New Year Resolution #2, from Me, Bernie Madoff

Resolution #2; I'm going to stop trying to defend the many people that invested their client's money with my firm. Ruth's reminded me that whenever I mention someone, others might think they actually understood how my business worked.

They didn't.

At least not many of them. Sure, I paid them fees. Sure, their investors paid them fees on top of that. Everyone got paid. Hell, the kids at Fairfield Greenwich made more than my own kids!! So, I still don't understand what everyone is kvetching about.

Everyone?s wondering how I did it. How many other people were involved.

Let me make something perfectly clear ? even in the late 80?s and early 90?s there were plenty of computers available at Radio Shack, Sears, and dozens of other stores on every corner of Long Island as well as any other city in this country) where, for a few thousand dollar, I was able to buy all of the technology necessary to create legitimate looking confirmations and monthly statements, all of which added up to the penny because of a simple LOTUS 123 spreadsheet program. Yes, it became easier and less expensive as the years progressed ? technology became substantially more flexible, powerful, professional looking and the expense just kept getting cheaper.

But I still attribute my initial trading program to Eddie Antar, the genius behind Crazy Eddie's. He just kept having ?Dr. Jerry? yelling and yelling on TV how his PRICES WERE IN-SA-A-A-A-A-ANE!!. One thing lead to another and after hearing his mantra in my sleep I subconsciously became insane and made my prices equally insane.

Mind you, unless anyone who really was familiar with what I was doing examined these statements, the average client, and the average professional; tax lawyer, accountant, broker, etc who may have reviewed these statements never would have come to the conclusion that while it was possible for me to do this for a few accounts with maybe $50 million, once the numbers got into the billions, I would have been doing 50-100 times the daily volume that actually occurred at specific prices.

In other words it was like telling my clients we sold 10 million hot dogs at Jones Beach on July 4 weekend. Who knows how many people go to the beach??

Not me, and certainly not them, and I?m sure if anyone had picked up on some incongruity, my reputation was enough to put them at ease with some explanation of overlapping trade / settlement dates or something. I can?t remember having to make many of these explanations, and those that I did make I can?t remember ? I think memory and sanity are like milk and pizza ? they don?t go very well together.

I will point out that unlike the Antars, the only money that I got from running this MADOFF was fees on profits I thought I should have been making for you.

It?s not like I wrote a check out of a fund of your investment to buy myself those ridiculous statues or planes or homes. Had I done that I?m not sure I?d be around at this point..my friend Al M. will confirm that. Oy.

Yes ? I am very comfortable, my kids are very comfortable, and we moved most of the assets into trusts that can't be penetrated easily. Yes, its fair to guess that my assets exceed $100 million, but most of that is illiquid ? homes, art, boats. I can?t relocate to another part of the world with a meager $20 mil and expect to live comfortably and without fear that I?ll have a knock on the door on any given day by someone who wants to make things right.

I?d need a few billion so I could have an island and a full time security force plus a staff of publicists and intelligence analysts to make sure I?m completely off the radar. That?s the reason I?m still around.

Plus, based on how things have been progressing, I wouldn?t be surprised to get off with a fine (which might cause me to sell one or two homes, but I?ll be alright, don?t worry) and if I need to spend some time away, I?ll be able to play golf with my friend Mel Weiss. That is if he didn?t lose too much money and is pissed at me. I don?t think he is though, since his former firm, Milberg, LLP, is going to clean up on representing dozens of investors who were unfortunate enough to believe the bullshit I was sending them every month! See you soon, Mel.

Full post as published by Bernard Madoff on January 01, 2009 (boomark / email).