Sunday, August 16, 2009

Too Good to Be True -- Book Review

Too Good to Be True by Erin Arvedlund is a Bernie Madoff biography that delves deeply into the many convoluted relationships a fraud artist constructs. Erin weaves together many of the entanglements and shows the crazy network that supported the largest Ponzi Scam in Financial History.

Erin Arvedlund is the author of a 2001 Barron's article that questioned Madoff. She determined and said publicly that "The Emperor Wears No Clothes" This was earth shattering at the time.

Where we need to go now is why the SEC let him get away with it. Not registered with the SEC, OK why did the Attorney General let him get away with it. This is naked fraud and theft. We need the law enforced before the fact, not $60 Billion after the fact. Thou shalt not steal has been in our value systems since biblical times.

The book is very good at documenting experienced and established market participants who meet with Madoff, tried to replicate or understand his success and realized that the guy is a fraud.

The book is also very good at documenting the greed of the investors who did not do due diligence and were wilfully ignorant. This group was the overwhelming majority of sheep.

The book also provides excellent descriptions of the ways of Wall Street both good and bad that any investor should know about.

Kudos Erin Arvedlund