Tags: trump | madoff | sleazebag

Trump Calls Madoff a Sleazebag, Crook

By    |   Friday, 19 Dec 2008 01:46 PM

Real estate magnate Donald Trump calls Bernard Madoff, the man prosecutors allege bilked investors of up to $50 billion over decades, a "sleazebag" and "a total crook."

Yet, Trump told CNN, investors with Madoff bear some responsibility as well.

Madoff, a former Nasdaq chairman, has been charged with fraud in his role running a hedge fund that the feds say was nothing more than a big Ponzi scheme. Investors have lost billions; foundations have closed as a result, and hedge funds and banks that held positions with Madoff are tallying up the damage.

“The people in Palm Beach, many of those people have been just ripped off by this sleazebag, and they'll never see the kind of money that they've seen,” Trump told CNN.

“You have some people gave 100 percent of their net worth to him in trust, because they trusted him, they trusted his family, they trusted everybody, and now they literally are selling their houses in order to live.”

Part of the reason the alleged scam worked is because people did not question Madoff’s consistently high returns of between 10 percent and 17 percent.

Keeping the apparently false results within reason might have helped Madoff continue the scam for so long. Classic Ponzi schemes typically promise astronomical returns in very short periods of time, something even moderately intelligent investors would see through.

Yet, in the end, Madoff’s “fund” was just as unsustainable. Once the credit markets froze and new investors stopped coming in, Madoff would have had to produce cash from nowhere. It appears that he couldn’t, and the house of cards fell apart.

“The word is very simple. It's a word called ‘greed,’” says Trump, who claims he lost no money from the Madoff fallout.

“Greed. That's all it is. People were greedy. They thought he was going to get them a little bit more return, or a lot more return. I mean, he was a Svengali for rich people. There are Svengalis for women; this guy was a Svengali for rich people — very rich people.”

Market guru Laszlo Birinyi says the scheme may make for good water-cooler chat but has little impact beyond the scam’s unfortunate victims.

“This will have a very short duration,” he told Bloomberg TV.

“What everyone is really worried about is economic growth. This becomes a gossip issue, and I’m not sure it really affects the market.”

If the scandal involved the fate of a major financial institution, the consequences would be greater, he says.

“But other than being a Wall Street version of People magazine, I don’t think it will have much impact.”

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Real estate magnate Donald Trump calls Bernard Madoff, the man prosecutors allege bilked investors of up to $50 billion over decades, a "sleazebag" and "a total crook."Yet, Trump told CNN, investors with Madoff bear some responsibility as well.Madoff, a former Nasdaq...
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2008-46-19
Friday, 19 Dec 2008 01:46 PM
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