Barrel Strength

The $50-billion Ponzi scheme by Madoff has, as expected, a very long list of victims given the amount involved but what is astonishing is the blue-chip banking names that were victimized.

RBS – $600m
Man Group – $360m
Banco Santander $3.1bn
HSBC – $1bn
BNP Paribas – $470m
Natixis – $600m
Unicredit – $100m
Nomura – $303m
Bénédict Hentsch – $48m
Fairfield Greenwich – $7.5 billion
Kingate – $2.5bn
Tremont Capital Management- $1bn (reportedly)
Bramdean – (9.5% of assets under management)
Reichmuth Matterhorn – $327m
Access International Advisers – $1.8bn (Bloomberg)
Ascot Partners – $1.8bn (Bloomberg)
Union Bancaire Privee – $850m (Reuters)
Maxam Capital Mangaement $280m (reportedly)
Pioneer Investments – $280m (reportedly)
EIM Group – $230m (Wall Street Journal)
Benbassat & Cie – $935m (Reuters)

GRAND TOTAL SO FAR – $24.1bn

h/t  The Madoff-o-Meter

This is something to consider when taking advice from your friendly and sophisticated banker.  One does have to ask why these so called “sophisticated investors” were unable to fathom that there might be something wrong, given the high serial correlation of returns.  The word is that investors knew something was wrong, but they thought that Madoff was illegally using information culled from the market-making subsidiary, which could explain the returns, i.e. he was using the information illegally to front-run trades.   Nobody thought he had the audacity to run an old-fashioned Ponzi scheme.

Last word on the liberal do-gooder who ran the fund: Bernard and Ruth Madoff bought their home on North Lake Way in 1967, and are among the most long standing members of the club. The Palm Beach Country Club is the ultimate symbol of the Jewish ascendency. Unlike the WASP clubs, to join you have to have made major charitable contributions. You also have to have made your fortune in clean ways. There are no garbage magnates, no slum lords. You have to be a person of character. And there was no one more revered and honored than Bernard Madoff.

Update

And it looks like the frugal Scots were also undone in this financial mania.  Timing is everything.

One year ago Royal Bank of Scotland paid $100 billion for ABN Amro.

For this amount, one could now buy:

Citibank $22.5 billion
Morgan Stanley $10.5 billion
Goldman Sachs $21 billion
Merrill Lynch $12.3 billion
Deutsche Bank $13 billion
Barclays $12.7 billion

And still have $8 billion in change……for which one would be able to pick up GM, Ford, Chrysler and the Honda F1 Team.