The Madoff Economy »
Posted By Beau7890 11 months, 1 week ago in Business & FinanceThe pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.
Consider the hypothetical example of a money manager who leverages up his clients' money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while -- say, as long as a housing bubble continues to inflate -- he (it's almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big -- but he’ll keep those bonuses.
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Beau7890
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ibstilyn11 months, 1 week ago
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For a moment there I thought the title was "The Madeup Economy" as this also made sense. And not only is it almost always a "he", that "he" is usually a staunch republican. To further prove what Newt Gingrinch stated (" the problem with republicans is that we devour or own young") I offer the following
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REPUBLICAN INVESTORS RESORT TO CANNIBALISM
SEC investigators working with the IRS have uncovered a bizarre cannibalism plot concocted by Bernard Madoff. Investigators speculate the plot was perpetuated to minimize the risk of his fraudulent transactions being discovered by his "nosy" Republican clients.
Beginning in late 2007, Madoff discovered that his "nosy" Republican clients began looking into their investments and "asking questions". Fearing that his Ponzi scheme would be discovered, Madoff began advising his clients to eat their own children in return for a favorable tax write-off. Madoff’s instructions cited a non-existent income-tax law from 1821 as stating, "...if said business were to fall prey to cannibals, then the owners are hence awarded 100 times the stated value of said business."
The fictional tax break promised a "windfall of financial benefits with the cannibalistic destruction of your incorporated tax shelter." Madoff provided his clients with a step-by-step instructional guide denoting the process of incorporating your own child as a tax-shelter and then eating them. Madoff even bragged to his clients that he personally used this write-off last year to get over six million dollars back from the IRS for eating his nine-year old son. Recipes were not included.
Many of his clients took Madoff at his word and committed horrendous acts of cannibalism. According to IRS records from Madoff clients, tax returns showed 73 children have been claimed as "cannibalized". As 2008 winds down, the IRS expects many more "cannibalized" write-offs to be coming from Madoff clients.
When presented with the news of the hoax, Lawrence Shattuck III stated, "I was absolutely shocked when I got a measly $125,908 back in taxes from the IRS. Was this all my company / child was worth?"
"I’ve got the Corporate Cannibalism Act of 1821 on my side and if I have to, I’ll take the IRS to the Supreme Court!" exclaimed Earnest P. Whithers of Houston, TX. When presented with the falsity of the rumor, Whithers was devastated. He sobbed, "How will I ever payoff my yacht with this chump change?"
Asked why he singled out his Republican clients, Madoff stated, "For one, democrats are too broke for me to bother speaking with them and two, my republican clients were actually stupid enough to vote for Bush twice, so I figured they would probably be stupid enough to eat their own children and leave me alone."
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