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Matt Levine

A Happy Anniversary for Madoff’s Scam

Also Elon Musk, hedge-fund transitions and perpetual bonds.

The most basic investing scam is:

It’s a good scam (for me) in that it is efficient: All of the money that you invest, I steal, which maximizes my chances of buying a yacht and sailing away from the criminal authorities. The margins are good. On the other hand there are some limits to how big this scam can get. I can send you fake account statements, etc., to try to persuade you that your money is well invested and you should give me more, but eventually if I want to raise a lot of money I will have to spend some of it on creating verisimilitude rather than steal it all for myself.