Madoff’s models

I’ve been a bit busy, writing about how Jews aren’t to blame for the economic mess and the like, so I hope you’ll excuse this three-week-late reference to a New Yorker essay about “Madoff and His Models.” The article by Ron Chernow, author of several excellent financial books, including “The Warburgs,”  focuses on the Ponzi scheme’s namesake, Charles Ponzi, who was brash and flamboyant and flamed out after less than a year of high-rolling, and his Swiss predecessor Ivan Krueger.

The most interesting section of the article was that which discussed just how different Madoff was from his models, how his Pyramid Scheme 2.0 took conning to the next level with a touch of class and exclusivity. Here’s an excerpt:

Instead of openly courting investors, he pretended to fend them off. Back in teh nineteen-twenties, sophisticated investors joined together in pools that manipulated individual stocks, and such funds acquired a certain cachet. Something similar happened in recent years with hedge funds, which retained snob appeal even when returns flagged. Madoff made it seem impossibly difficult to invest with him. As a rule, his fund was closed to new investors, requiring special introductions to the club. “I know Bernie, I can get you in” was the open sesame whispered throughout the world of Jewish society,  where “Uncle Bernie” was affectionately touted as “the Jewish bond.”

Unfortunately, that bond matured.