Giving Ponzi a bad name

Fortune:

Charles Ponzi's biographer [Mitchell Zuckoff] contends that he was just a dreamer without a good exit strategy.

Charles Ponzi wouldn't have thought much of Bernard Madoff.

Legendary Wall Street trader Madoff reportedly admitted last week that his success was an illusion, a fraud in which investors were paid not with the fruits of his own acumen, but with money from other investors. Prosecutors quoted Madoff as telling an associate that his $50 billion business was "basically, a giant Ponzi scheme."
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Remember, Ponzi started with nothing and thought he had found a legitimate, if far-fetched, road to riches. If the allegations against Madoff are true, he enjoyed great success but couldn't deign failure. Prosecutors say that when he began losing money, he indulged in greed and hubris to create imaginary profits. He allegedly knew all along it was a scheme, and it only unraveled when the economy turned, his investors sought their money, and he tried to siphon off a last few hundred million for undeserved bonuses.

Year in year out Madoff "produced" 10 percent returns for his "investors." There's a few words that describe them, too -- hubris, greed, stupid. But perhaps we get what we deserve when we think government is watching out for us.

Ever heard of swoopo? It's described as "close to pure, distilled evil in a business plan." From the description it sounds like auctioning a dollar -- the all-pay auction where the highest bidder gets the dollar but everyone who bid pays their highest bid. How much would you bid?

Addendum. "The UAE Central Bank on Tuesday reassured Federal National Council (FNC) members of its strong stance against illegal investment companies seeking to raise funds from the public. The issue was raised by member Mohammad Abdullah Al Za'abi, who posed a question to the government in relation to recent cases where some investment companies lured the public to deposit funds in return for unjustifiably high returns."