Where Were the Accountants?

The Madoff ponzi scheme could become a house of cards for the market today and as Eric Bolling would say “no money for you Detroit.” Today will be a confluence of events that could really knock the starch out of the market as futures are just getting killed. The question becomes, is my hedge fund clean, or is it another ponzi scheme or three card monty scam?

I used to run a fund, a big one, and I couldn’t and I couldn’t breath without having my attorneys and accountants sign off on things. Last night I asked the question to some of buddies, where were the accountants? Well, it turns out this morning that the accounting firm was a little two man shop in Rockland County, NY. in an eight by ten office. A fund of that size should be with a big eight accounting firm not with Murray and Harry in a small operation. You cannot pull off a scam of this size without enablers. The funds and sophisticates that invested with Maddoff should know that. Where the hell was their due dilly?

That story is still developing, but there should be more hedge fund liquidations as a byproduct of this implosion. Most investors do a “fire, ready, aim” when this stuff happens. The autos were denied, so that will also add pressure to the market, so today could really be ugly.

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