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Strategies & Market Trends : Fundamental Value Investing
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To: bruwin who wrote (768)12/19/2008 2:42:54 PM
From: The Ox1 Recommendation  Read Replies (1) of 4719
 
...which could possibly have been avoided had there been some degree of adequate Regulatory intervention.


Bingo.

Often, the inner workings of a Ponzi-scheme is based on having the new money coming in going out in payments to the older holders...keeping the older holders happy. They encourage more new money to come into the fold.

As long as you keep bringing in more and more new money, the scheme can go on undetected, as no one is there to raise the red flag. The house of cards collapses when either the scammer runs off with the new money or they fail to bring in more money. Neither happened with Madoff, as it was his confession which brought down the house.

In the past, the SEC took Madoff's records at face value and did not do any digging to see if they were accurate. Their job was to dig but they failed to do their job. Failed regulatory oversight. Period.

The SEC has been looking the other way for some time now. They do evaluations at face or surface value and do not dig very deep these days. This must change and should when the new administration gets underway.

There are so many areas in the equity markets that are lacking in proper oversight. Its going to be a daunting task to clean it all up and install the necessary rules to change the way the "game" is being played, to create a more level playing field.

jmo

TO
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