Ponzi returns

The effects of the Bernard L Madoff "ponzi scheme" continues to ripple through the financial and especially the Jewish (philanthropic) world. At last count, two family philanthropic foundations (Chais and the RL Lappin) have closed their doors due to extensive losses. Others are hurting and will feel forced to cut back on their grants. Then there are the numerous investment firms who lost their investments. According to Madoff's own estimates, losses total $50 billion. It seems that closer you were to him, the harder you were hurt. Exposure to him and his investment services [sic] was radioactive and poisonous.

While I trust a lot of people are currently hurting--the loss of retirement nest eggs, loss of personal value--my sympathies are tempered by (a) how people continue to believe in "something too good to be true" (e.g. 10% return when the market is either lower or in decline) and the (b) innocent people who are going to suffer in the future because the brazen greediness of investors (e.g. potential recipients of philanthropic funds, individuals who 'parked' their savings with a trusted financial advisor who in turn turned over the funds to Madoff).

There are no winners in this situation. The $50 billion is mostly unrecoverable since it was used to pay off earlier investors. Whatever good may have arisen from the money is gone forever. Madoff will receive some kind of prison sentence, but I doubt it will assuage anyone's anger and sense of being violated. The sense of underlying sense of trust between friends and between business partners is also gone. It'll take a little while for a healthy equilibrium to return.