Category Archives: investment

Madoff’s masterly $65bn sucker game

Web of exquisite lies

Bernie Madoff, writes Dalrymple, was the type of swindler

who is hyper-respectable and sober in appearance. How gladly I should have entrusted my savings to him if he had asked me! Such a calm, intelligent face, full of strong but discreet character!

His Ponzi scheme

was so brilliant that even now it excites my admiration, though I know that it was wicked.

Madoff offered

not huge and spectacular gains, but steady, invariant, yet more than adequate ones that could plausibly have been the fruit of unusually wise investment in turbulent times.

The gains were offered

only to the people whom Madoff accepted as clients, who then came to think of themselves as specially privileged to be taken into his embrace, which turned out be more spider’s web than sheltering fold.

How to join the 1%

Screen Shot 2015-10-04 at 12.33.35Theodore Dalrymple answers your questions

Should we wish to be of the 1%?

Wealth as such is not a very elevated aim in life.

What about you, Doctor?

I have never made it my principal aim or goal.

To have a sufficiency, though, is both necessary and gratifying, is it not?

A degree of prosperity is at least some evidence of worldly success — an imprimatur as it were, to which I have never been quite as indifferent as perhaps I ought to have been.

Do you feel wealthy?

Not enough to feel that a new car would not be an unwise extravagance if it were unnecessary.

What do you look for when buying a car?

My main desideratum is that it should start first time in the depths of winter. For many years I owned cars that could not be relied upon to do so.

How did you get into the 1%?

My wife and I lived well below our income for more than 20 years and invested the rest under the guidance of an adviser.

What criteria did you apply in selecting this adviser?

I had no real evidence of his superior financial wisdom, other than that I liked him.

Does such wisdom exist?

I am not convinced that it does.

How would you rate your own judgment in financial matters?

Let me admit that if I had had the misfortune to meet Mr Madoff before his scheme was exposed, I should have trusted him implicitly. He had such a trustworthy face.

What is your pattern of consumption and mode of life?

It does not differ conspicuously from those of many of my peers, except in so far as I have no television and buy many more books than most.

What do you fear?

To be poor — and to end up in the hands of the State, whose charity is simultaneously patronising and heartless, rule-ridden and capricious.

 

Teddy Dalrymple’s financial affairs

Screen Shot 2014-07-22 at 13.09.42Although he subscribes to investment — speculation — newsletters, which of course contradict themselves regularly, Teddy’s financial affairs have never really captured his imagination.

He does, however, invest in ‘antiquarian books on arcane subjects’.

ZZZ rating

Screen Shot 2013-04-24 at 03.00.47

Quiet please. Research on bonds being undertaken

Moody’s has been sleeping on the job for years. Its ineptitude, writes Dalrymple, is demonstrated by the high ranking it used to accord Britain.

Dalrymple examines various aspects of the British economic mess that the rating agency, luxuriating in a deep slumber, failed to notice. For instance, the British prime minister Tony Blair used repeatedly to refer to big spending increases

as ‘investments’. So did [the chancellor and Blair’s successor as premier] Gordon Brown.

Blair

felt it unnecessary to provide evidence that this spending brought benefit, economic or otherwise, or to consider its costs. He spoke as if the money came from a generous extraterrestrial donor and not from higher taxes and government borrowing.

Dalrymple concludes:

A country with a government that cannot tell the difference between investment and expenditure is one from which lenders would best steer clear.