Is the world on the edge of unprecedented economic catastrophe?
The world has not seen such financial mess since the 1930s Great Depression. It has been one depressing news after another.Many have though the collapse of Lehman Brothers and financial troubles at AIG, Freddi Mac, Fannie May and other less significant financial entities would be the end of the trouble.Than came another big shocker that the three big Detroit car makers were also in serious financial trouble and are asking the US government for bail-outs.The biggest of the three, GM claimed it would be bankrupted in three months time if the government doesn't throw a lifeline.
Just like in the 1930s the trouble eventually spreads to other part of the world before the whole financial and economic system collapsed and with it a long drawn recession leading to economic depression.At the moment the financial crisis are only confined to US and Europe.The impact has not hit Asian countries yet which usually takes between 6 to 12 months before it sank its teeth and announces its arrival.
Many Asian countries are also slow to open their books to reveal the true situation hoping the problem would go away .The only do so when the situation becomes untenable.
Are we heading for a complete collapse of the financial system?
Three days ago the most unexpected and most scandalous of all the bad news so far was the disclosure of huge fraud by respected financier and former Nasdag chairman Bernard Madoff.He stands accused of operating an elaborate Ponzi scheme to the tune of $50 billion.His list of clientele is like reading Forbes's rich and famous.The disclosure is a big slap to his clients who probably made the investments based on the cover of the book.Funds run by a well respected man? Who would have guessed he turned out to be a crook?
Former Prime Minister Mahathir Mohammad may be having the last laugh to know that he wasn't wrong about the Americans.
Below is a story of an investor who got completely wiped out by Bernard Madoff.
How I Got Screwed by Bernie MadoffBy Robert Chew
The call came at 6 p.m. on Thursday, Dec. 11. I had been waiting for it for five years. When the call finally arrived, it was my wife Sarah who answered. What the person said on the other end of the phone was both simple and devastating: we were financially wiped out.
Of course, I knew this instantly from the look on my wife's face. Her words to the caller, the person handling our financial matters, grew insistent: "You're joking? This is a joke, right?"
We didn't know it yet, but we had been playing in the Bernard Madoff Investment Securities LLC Fantasy Financial League. It began when we sold our home at the peak of the market, collected what was left from an old divorce, found other monies and then, with a combination of pleasure and trepidation, handed our bag of cash over to someone named Stanley Chais, the Los Angeles network organizer for a man named Bernard Madoff.
Of course, we never heard the name Madoff — which has a peculiarly Dickensian ring now — and had no idea how he achieved such fantastic returns over the past 40 years. All we knew was that my wife's entire family had been in the fund for decades and lived well on the returns, which ranged from 15% to 22%. It was all very secretive and tough to get into, which, looking back, was a brilliant strategy to lure suckers. Unlike the usual Ponzi mechanics, the fund even stopped investments into accounts a few years back, at least in our network. There were the usual warnings prior to investing — we all knew it was a risk, we were told to make sure we were diversified, blah-blah — but, my God, it had been going strong for so long and with such fantastic returns, we had to get in. The Securities and Exchange Commission even gave Madoff a clean bill of health several years ago, we now find out. Well, maybe not a clean bill, but it didn't shut him down either. In the topsy-turvy world of investment, we were quietly, richly safe. Until the call. (See the top 10 worst business deals of 2008.)Read more......