Sunday, August 16, 2009

feeder funds


When a fund that is a feeder
turns into a money bleeder
investors who’ve been badly scammed,
if not yet flat-line cardiogrammed,
call in for help the FBI,
and have to wave their wealth bye-bye.
There’s no point asking for refunds
from managers of feeder funds,
who generally are quite immune
to prosecution, though the tune
the piper played was paid by them.
The FBI cannot condemn
these rascals, or the bankers who
loaned money for this succès fou,
and still deny of guilt the onus,
awarding a humungous bonus
to all who got us in this mess,
themselves, by turning more to less.

The co-conspirators who’ve pissed
vast sums away will not be missed,
because the ones who do not keep
their jobs—and many will—still sleep
quite soundly, supervised by Feds
who’re also sleeping in their beds
when they’re not borrowing more cash
from China, and refuse to smash
root causes of the problem that
may force us soon to pass the hat
around, since we now all are bleeders.
Play close attention, please, dear readers.
The deficit’s the problem, stupid,
and while Rome burns no one can dupe it.

Our problems, worse than Madoff’s fraud,
loom did Damocles’ sword;
in wait for us they lie, while lurkin’
as once with feeder funds E. Merkin,
and Gabriel and Fairfield Greenwich,
famed predatory feeder ménage,
while everyone’s still in denial
until their case comes up for trial,
including Treasury that borrows
and puts off until sad tomorrows
the day of reckoning, a banker
that’s slower than an Exxon tanker,
which spills the wealth it bleeds like oil,
to Wall Street losers ever loyal.

Inspired by Michiko Kakutani’s review of Erin Arvedlund’s book “Too Good to Be True: The Rise and Fall of Bernie Madoff” and “Betrayal: The Life and Lies of Bernie Madoff,” by Andrew Kirtman (“A Scoundrel in the Land of the Lax,” NYT, August 14, 2009):
Bernard L. Madoff was not just the world’s biggest thief, who decimated the savings of thousands and wrecked countless lives, but he also became the hated embodiment of a gilded era that crashed and burned in 2008. He was a liar and a cheat who flourished in a bubble economy where people got used to living beyond their means; where cheap credit fueled pie-in-the-sky, get-rich-quick dreams; and where both the wealthy and not-so-wealthy bought into schemes that defied gravity and logic. As the investigative reporter Erin Arvedlund observes in her new book, “Too Good to Be True,” Mr. Madoff “personified all that was false, all that appeared to be upside down in the world” at a time when it was suddenly revealed that “homes weren’t worth what was once thought, stock prices stopped going up, all assets seemed to collapse in value at the same time.” Or, as the journalist Andrew Kirtzman observes in his new book, “Betrayal”: Mr. Madoff was both “a proxy” for the sins of “financial institutions whose irresponsibility almost brought down the economy,” and a “frightening example of nobody asking questions when the going was good,” of a society in which few “questioned the sanity of subprime mortgage derivatives” or the odds of endlessly rising house prices, and in which government regulators were too hapless or lax to put the brakes on abuses and outright deceit….
Of course, as the long-ignored Mr. Markopolos well knew, clues to Mr. Madoff’s scam were also available to his more financially savvy investors, particularly the heads of funds like those run by the Fairfield Greenwich Group and the Gabriel Capital Group. But denial seems to have been the order of the day on the part of feeder-fund brass who were getting rich collecting management fees for the money they were handing over to Mr. Madoff. Some simply failed to do due diligence. Some assured themselves that a successful broker like Mr. Madoff, in Ms. Arvedlund’s words, “didn’t need to be a crook.” And some suspected that he might be up to something illegal, but assumed he was doing it on their behalf. In the end, there was a broad spectrum of Madoff victims, who spanned many classes and communities and much of the world: friends and their friends and relatives who trusted “Uncle Bernie” to keep their money safe; ordinary people who had no idea that the feeder funds they’d invested in were actually funneling the money to Mr. Madoff; retail investors who thought they were being prudent in choosing funds that promised such consistent returns; wealthy clients who thought they were joining an exclusive club by handing their cash over to Mr. Madoff; and some clients who thought, as one banker put it, that “they were getting a real Rolex for 20 bucks.”

© 2009 Gershon Hepner 8/14/09

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