The Timid Reporter sent me this interview. Judge for yourself. (Any similarity to persons actually living or events actually happening is coincidental, he said)
TR: Good afternoon. Are you Bernard L. Madoff?
BM: Yes, but you don’t have to be so formal – call me Bernie, please.
TR: Yes sir. May I come in?
BM: Sure. Make yourself comfortable. I’ve been expecting you.
TR: It smells like apple cider in here.
BM: I hope you find it pleasant my friend.
TR: Yes, very pleasant.
BM: I would offer you some but I’m afraid we’ve run out of Styrofoam cups.
TR: Why not use a real cup?
BM: My wife won’t let me.
TR: Well, I drink beer anyway.
BM: Beer is bad for you.
TR: Not so far.
BM: Why do you say that?
TR: I’ve been drinking beer since 1798 and have not been badly affected.
BM: Is that so?
TR: Yes sir. I only stay away from dark ale.
BM: That’s very amusing although a little perplexing too because I know you can’t be conning me – I would be able to tell, you know. You don’t look more than forty years old.
TR: I suspect that’s probably true. You are a very shrewd and wise man.
BM: I know how men think and what they crave the most.
TR: You would have made a good psychologist.
BM: On the contrary – I think I would have made a good politician. A psychologist is easily fooled. A politician only pretends to be fooled – a politician is the greatest deceiver of all. He is the master of the ancient art of manipulation.
TR: Mr. Bloomberg might not appreciate your saying that about him.
BM: I can always say I was misquoted.
TR: But my readers know I’m very careful.
BM: Sure, but he’s not one of your readers. What are people saying about me anyway?
TR: That you’re a schemer, a deceiver, a thief, a fool, a fixer, a flake, and a fraud.
BM: Well, that’s not too bad though I don’t really care what people think. I only care about what my own family thinks.
TR: They are the ones who said it. It’s in The New York Times.
BM: How can they be so ungrateful?
TR: The New York Times?
BM: No, my sons.
TR: …Ruth and your sister and your niece, too.
BM: Well, shame on them for kicking a man when he’s down - a poor elderly man.
TR: Do you think you’ll end up in prison?
BM: You mean, die in prison? Of course not. What do you think lawyers are for? By the time we get done with all the appeals, I’ll be ninety five. I just hope they can save my licenses. I might go work at Merrill Lynch or Bear Stearns or Lehman - as a partner, of course.
TR: They no longer exist.
BM: What are you saying - since when?
TR: About four months ago.
BM: Are you serious? What is this world coming to?
TR: I think they went bankrupt.
BM: I remember hearing something about it. You know, I haven’t read much in the last three years – not even the financial papers. I simply haven’t had the time.
TR: What have you been doing?
BM: Doing? Doing a lot of bookkeeping, that’s what I’ve been doing.
TR: Didn’t you have people doing that for you?
BM: They couldn’t be trusted with the Ascot accounts.
TR: A lot of your friends are angry with you.
BM: How come they weren’t mad at me when I was making them a ton of money? Do they expect me to apologize?
TR: They want their money back.
BM: Sure, sure, everybody does. Don’t they realize that asking for their money back is what caused this whole enterprise to collapse in the first place? It was like a run on the bank. I warned them. Don’t cash out, don’t cash out – wait for a scheduled distribution. Be patient. Instead, it was like a stampede of wildebeest.
TR: Didn’t you at least have a few billion left?
BM: Sure I did, but I had to pay as many people as I could before word got out that I was insolvent.
TR: Who?
BM: My closest friends.
TR: Like who?
BM: Let’s just say Bloomberg, Trump, Schumer, and Kennedy got taken care of.
TR: …Because you didn’t want to cross them or what?
BM: No, I didn’t. They’re a mean bunch – more cold-blooded and ruthless than I am, especially that Caroline girl.
TR: What about Clinton?
BM: The Clintons took their money out two months ago - even Chelsea.
TR: Maybe they knew something….
BM: Of course they knew – everybody knew. Nobody’s that dumb.
TR: And the SEC auditors?
BM: They were somewhat incompetent, but I also think they had their doubts - you know how the government is – if you have enough clout, you have nothing to fear from them. I just told them that if they wrote me up I would go above their heads. They wrote their reports full of imprecise and equivocating double talk – you know, maybe this and perhaps that; it appears that and it seems like – really vague stuff, nothing you could sink your teeth into. Naturally, the upper guys let me off the hook every time. There was a lot of gray in those reports. I also let some of the SEC higher ups invest with me.
TR: Really?
BM: Sure. Would I lie about something like that?
TR: How did you fool the sophisticated investors and hedge fund managers?
BM: Easy.
TR: How?
BM: Look, let me give you an example. I’ve been around financial jargon all my life. I know how people react to it. When they don’t understand it, they get frustrated and would rather be gored by a bull than be made to feel dumb. I will give you an introduction to my investment strategy and you tell me when to stop.
TR: Ok.
BM: Typically, a position in an Ascot Partners account will consist of the ownership of 30 to 35 S&P 100 stocks, most of them correlated to that index, the sale of out-of-the-money calls on the index, and the purchase of out-of-the-money puts on the index. The sale of the calls is designed to increase the rate of return, while allowing upward movement of the stock portfolio to the strike price of the calls. The puts, funded in large part by the sale of the calls, limit the portfolio's downside or risk ratio. A simple split-strike trade involves buying a stock at price X, selling a call option with a price Y which is above X, and purchasing a put option with a strike price Z which is below X. If the price of the stock is above Y at expiration, the stock will be called away and the investor receives Y for the stock. If the price is below Z at expiration, the put can be exercised and Z received in cash. This effectively caps the maximum gain….
TR: Stop. Please.
BM: I could go on like that for hours.
TR: I believe you.
BM: So the idiots would just say to me: “Bernie, don’t bother to explain all this to us, we trust you, you’re a genius, just send us any gains.”
TR: Do you have any words of advice for my eight readers?
BM: Tell them they’re lucky to be poor.
TR: Thank you Bernie.
BM: Thank you my friend and sorry about the cider.
TR: Good afternoon. Are you Bernard L. Madoff?
BM: Yes, but you don’t have to be so formal – call me Bernie, please.
TR: Yes sir. May I come in?
BM: Sure. Make yourself comfortable. I’ve been expecting you.
TR: It smells like apple cider in here.
BM: I hope you find it pleasant my friend.
TR: Yes, very pleasant.
BM: I would offer you some but I’m afraid we’ve run out of Styrofoam cups.
TR: Why not use a real cup?
BM: My wife won’t let me.
TR: Well, I drink beer anyway.
BM: Beer is bad for you.
TR: Not so far.
BM: Why do you say that?
TR: I’ve been drinking beer since 1798 and have not been badly affected.
BM: Is that so?
TR: Yes sir. I only stay away from dark ale.
BM: That’s very amusing although a little perplexing too because I know you can’t be conning me – I would be able to tell, you know. You don’t look more than forty years old.
TR: I suspect that’s probably true. You are a very shrewd and wise man.
BM: I know how men think and what they crave the most.
TR: You would have made a good psychologist.
BM: On the contrary – I think I would have made a good politician. A psychologist is easily fooled. A politician only pretends to be fooled – a politician is the greatest deceiver of all. He is the master of the ancient art of manipulation.
TR: Mr. Bloomberg might not appreciate your saying that about him.
BM: I can always say I was misquoted.
TR: But my readers know I’m very careful.
BM: Sure, but he’s not one of your readers. What are people saying about me anyway?
TR: That you’re a schemer, a deceiver, a thief, a fool, a fixer, a flake, and a fraud.
BM: Well, that’s not too bad though I don’t really care what people think. I only care about what my own family thinks.
TR: They are the ones who said it. It’s in The New York Times.
BM: How can they be so ungrateful?
TR: The New York Times?
BM: No, my sons.
TR: …Ruth and your sister and your niece, too.
BM: Well, shame on them for kicking a man when he’s down - a poor elderly man.
TR: Do you think you’ll end up in prison?
BM: You mean, die in prison? Of course not. What do you think lawyers are for? By the time we get done with all the appeals, I’ll be ninety five. I just hope they can save my licenses. I might go work at Merrill Lynch or Bear Stearns or Lehman - as a partner, of course.
TR: They no longer exist.
BM: What are you saying - since when?
TR: About four months ago.
BM: Are you serious? What is this world coming to?
TR: I think they went bankrupt.
BM: I remember hearing something about it. You know, I haven’t read much in the last three years – not even the financial papers. I simply haven’t had the time.
TR: What have you been doing?
BM: Doing? Doing a lot of bookkeeping, that’s what I’ve been doing.
TR: Didn’t you have people doing that for you?
BM: They couldn’t be trusted with the Ascot accounts.
TR: A lot of your friends are angry with you.
BM: How come they weren’t mad at me when I was making them a ton of money? Do they expect me to apologize?
TR: They want their money back.
BM: Sure, sure, everybody does. Don’t they realize that asking for their money back is what caused this whole enterprise to collapse in the first place? It was like a run on the bank. I warned them. Don’t cash out, don’t cash out – wait for a scheduled distribution. Be patient. Instead, it was like a stampede of wildebeest.
TR: Didn’t you at least have a few billion left?
BM: Sure I did, but I had to pay as many people as I could before word got out that I was insolvent.
TR: Who?
BM: My closest friends.
TR: Like who?
BM: Let’s just say Bloomberg, Trump, Schumer, and Kennedy got taken care of.
TR: …Because you didn’t want to cross them or what?
BM: No, I didn’t. They’re a mean bunch – more cold-blooded and ruthless than I am, especially that Caroline girl.
TR: What about Clinton?
BM: The Clintons took their money out two months ago - even Chelsea.
TR: Maybe they knew something….
BM: Of course they knew – everybody knew. Nobody’s that dumb.
TR: And the SEC auditors?
BM: They were somewhat incompetent, but I also think they had their doubts - you know how the government is – if you have enough clout, you have nothing to fear from them. I just told them that if they wrote me up I would go above their heads. They wrote their reports full of imprecise and equivocating double talk – you know, maybe this and perhaps that; it appears that and it seems like – really vague stuff, nothing you could sink your teeth into. Naturally, the upper guys let me off the hook every time. There was a lot of gray in those reports. I also let some of the SEC higher ups invest with me.
TR: Really?
BM: Sure. Would I lie about something like that?
TR: How did you fool the sophisticated investors and hedge fund managers?
BM: Easy.
TR: How?
BM: Look, let me give you an example. I’ve been around financial jargon all my life. I know how people react to it. When they don’t understand it, they get frustrated and would rather be gored by a bull than be made to feel dumb. I will give you an introduction to my investment strategy and you tell me when to stop.
TR: Ok.
BM: Typically, a position in an Ascot Partners account will consist of the ownership of 30 to 35 S&P 100 stocks, most of them correlated to that index, the sale of out-of-the-money calls on the index, and the purchase of out-of-the-money puts on the index. The sale of the calls is designed to increase the rate of return, while allowing upward movement of the stock portfolio to the strike price of the calls. The puts, funded in large part by the sale of the calls, limit the portfolio's downside or risk ratio. A simple split-strike trade involves buying a stock at price X, selling a call option with a price Y which is above X, and purchasing a put option with a strike price Z which is below X. If the price of the stock is above Y at expiration, the stock will be called away and the investor receives Y for the stock. If the price is below Z at expiration, the put can be exercised and Z received in cash. This effectively caps the maximum gain….
TR: Stop. Please.
BM: I could go on like that for hours.
TR: I believe you.
BM: So the idiots would just say to me: “Bernie, don’t bother to explain all this to us, we trust you, you’re a genius, just send us any gains.”
TR: Do you have any words of advice for my eight readers?
BM: Tell them they’re lucky to be poor.
TR: Thank you Bernie.
BM: Thank you my friend and sorry about the cider.
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