Saturday, December 27, 2008
News Headlines Get Personal III
my retired neighbors drive their RV down to florida every winter. besides enjoying the sunshine, they spend time with other retired friends that live in retirement communities there year-round. when i was spending christmas eve with them, my neighbors told me that entire communities in florida were hit by the madoff scandal. after some thinking, it all made sense. a fellow international student told me that his family back in jamaica used to invest their money with a foreign exchange trader who would earn them a 10% return every month. he quickly became the top trader at his bank, and soon afterwards, jamaica’s cream of the crop heard about his reputation and snapped him up. now the trader spends his time making the country’s richest even richer. madoff was a similar character. he had an incredible track record, and a great reputation. as a result, word spread, and madoff won over the firms that handled retirement portfolios. when madoff collapsed, entire retirement communities did too. after all, if a certain firm is earning an incredible return on a couple’s retirement portfolio, their friends want in.