How Madoff did it? Cake futures.

So by now, everyone knows about Bernie Madoff, the most successful con man in history. His Ponzi {1} scheme has left countless investors bankrupt as he stole about $65 billion dollars. Billion.

So just how in the world Madoff made off with all your money? He’s a child and so are we. Here’s the perfect analogy.

The brilliant primer podcast, Planet Money, released a story by one of its producers Josh Bearman, where he relates a story from his childhood. He came up with a funny scheme in the lunchroom to acquire treats from his classmates by trading for a stake in future cake. But I can’t retell it as well, have a listen for yourself.

So here is the analogy breakdown:

storyreal life
Josh BearmanBernie Madoff
Josh’s classmatesBernie’s investors
school administrationSecurities and Exchange Committee

You ask me, Bernie should have been thrown the book a long, long time ago. But then that would have required some regulation.

Footnotes:

  1. the whole ugly truth []

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