Woe to be Rich

It is a bear to be rich these days. Take Harvard University, which reported losses of $9 Billion to its lofty endowment just in the third quarter. This amount is greater than the sum of the endowment funds for all but the most affluent universities. Running the Harvard endowment (i.e., managing the funds)was one of the most prestigious jobs in finance. Looks like Harvard was playing the risk reward game and got stung like many other common folk.

This week we learn of Bernard Madoff who has now made lots of rich people very mad. Amazingly, he was able to garner over $50 billion of investments from a number of well heeled investors only to use it for big Ponzi scheme. Many of these investors now are on the hook to lose most if not all of their investment. Interestingly, Mr. Madoff is the ultimate charmer, getting all kinds of people to trust him enough to put millions of their dollars in his hands. You can read about Madoff's ruse here. Seems that many people get sucked into presitious opportunities and are shamed to investigate lest they come off as a mere miser. I think it is called snob appeal.

Perhaps, the investors in Madoff's scheme need their own government bailout . . . consider that many of the victims of the scheme are charities and foundations. Madoff built his reputation in part on linking with charities. Many are now the victim of "friendly fire."