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Madoff vs. Credit Default Swaps

Started by Octaboy
over 17 years ago
Posts: 18
Member since: Sep 2007
Discussion about
Why is Madoff's financial dealings considered a Ponzi scheme but over-leveraged finacial transactions are not. Not trolling. It just seems that the way a Ponzi scheme is unsustainable and will inevitably collapse is exactly the same reason the Financial Industry collapsed. Thanks in advanced
Response by nyc10022
over 17 years ago
Posts: 9868
Member since: Aug 2008

because leverage isn't ponzi. Its just increased risk/reward.
Ponzi is falsified returns, with new money paying old money.

Granted, you could call the mortgage mess a ponzi scheme. Everyone thinking they could make tons in RE because of previous "returns". And someone got left holding the bag.

But, social security is definitely a ponzi scheme...

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Response by prada
over 17 years ago
Posts: 285
Member since: Jun 2007

nyc......How true that Social Security is a ponzi scheme!!!!

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