Bernie Madoff: Up Against the Wall

(MoneyWatch) 
I have to share this with you.

On Sunday, Chen Wenling, a 40-year-old Chinese artist, premiered his sculpture "What You See Might Not Be Real" at a Beijing gallery. Designed to be sum up the world financial crisis, it shows the Wall Street bull, propelled by, well, some say it's smoke (I think it's passed gas), pinning jailed financier Bernard Madoff against a wall. Some critics have interpreted the smoke as signaling the ruin of Wall Street, but I think that conclusion is premature, since we're again reading about zillion dollar bonuses granted in financial land. Another gloss is that those puffs of smoke are really bubbles, symbols of the formerly falsely frothy economy. Of course, to Madoff, it didn't matter if the economy was over-heated or not, since he was merely taking investors' money, depositing it in a Chase account, transferring it to other accounts in London, and spending it on himself and his loved ones. No wonder that in Chen's rendition, Madoff is wearing the horns.

And, speaking of loved ones, it looks as though bankruptcy trustee Irving Picard plans to sue Madoff's two sons, his brother, and his neice for $198 million, which he'll claim was transferred to them fraudulently. (He's already sued wife Ruth Madoff for $44 million.) Stacked against the $13 billion or so that's missing, however, it's chicken feed. What's more, it's hard to know whether that is really the extent of the fraud. To arrive at that $13 billion, trustee Picard analyzed some 4900 active accounts at the Madoff firm. And he insists that real losses equal the initial investment minus fictional profits and withdrawals. What's more, about 15,000 claims have been filed, which suggests that those folks never actually had an account with Madoff. Only the feeder fund that recruited them had an account. So far, these people have been granted no relief--and seem unlikely to get any. Even though Picard has moved aggressively to seize Madoff assets, it looks as though most victims will not get cents on the dollar, but fractions of cents.

So I think Chen Wenling has his symbolism wrong. It's not the bull market that got Madoff. Until his scheme fell apart, he was doing just fine. If Chen really wanted to get literal, he should have had investors pinned to the wall, not their victimizer.