A reader who has been through the experience of having tons of money and then suddenly not having it anymore writes:
I decided to think of the people who lost money in the Madoff scam differently today. At first, I had a vision of old family “blue blooders” who find every tax loophole to keep and make a dime being the real losers here. Heck, I lost $300mm in paper value in 2000-2001 so my first reaction was “I know how that feels”! I thought that it will make people stronger and they will learn to live without all the fake luxury things that don’t really make you happier. Flying in coach with the rest of the world has a great way of bringing you back to earth. So I guess I laughed at the situation.
Today, I changed my mind. I read about a lot of people who were carpet salesman and charity workers who got smeared. I think of large charities that were taken out and the impact it has so many less fortunate. … This can be compared to a flood or a hurricane ripping apart farms and business in a natural disaster. The difference here is there is no FEMA to jump in and rebuild. There were many elderly victims who can’t just go back to work.
My father in law told me last week that one should only put $250k in a bank as that is all that is really protected. He told me that balancing money is how to sleep at night. I wondered how all these people didn’t do the same?
Then I remembered how I didn’t sell any of my company stock in the bubble. So I was right there making the same miserable mistake. It was a lesson! But for me, I was 42 years old when it happened and I could recover.
I’ve been having similar thoughts (except for the part about losing $300 million). For the bankers and fund-of-funds managers who got caught up in this I feel nothing but Schadenfreude. But when I think of all the Jewish grandmothers and grandfathers (a.k.a. Bubbies and Zadies) who lost everything with Madoff I get very sad. They weren’t being greedy, and they weren’t stupid. They just wanted a steady investment managed by somebody they knew and trusted.