One of the Largest Financial Frauds in United States History

July 10, 2017 · Posted in American Business, Crime, Economic History · Comments Off on One of the Largest Financial Frauds in United States History 

Bernie Madoff was at once family man, trusted friend, business success story, and one of the most notorious Ponzi Scheme Kingpins in history. He was the man behind a deceitful scheme that devastated the lives of thousands including his own family.

By all appearances the Madoff’s were to be envied for their lavish lifestyle of private jets and country club living, but the foundation of their grand version of the American Dream was founded on fraud.

The decades long gig was finally up, when Madoff was arrested on December 11, 2008. He was surprised by the FBI in the early morning hours, while still dressed in his pajamas.

Upon hearing the big confession his sons did not wait, as their father had requested, but instead immediately turned him in to the authorities. And in fact neither son talked with their father again after the curtain was pulled back. They now knew who their father really was and the awful lie he had been hiding for all those many years.

Bernie was a success, but his success was not built on hard work and exceptional business acumen, but rather a delicate façade based on a relatively simple Ponzi scheme algorithm of theft and fraud. It all fell apart as many investors began calling in to withdraw their money (for some their entire life savings had been placed in Madoff’s care) in the wake of the 2008 Great Recession.

Who was this person capable of deceiving  thousands, including family and friends, straight faced and in a most calculated and convincing manner? A man who could sleep soundly beside Ruth in their Upper East Side apartment at night, while living the high life off other peoples savings. Does this make him part of that breed called psychopath? To learn more read the article in Town and Country  How Bernie Madoff took His Family Down .

Keynes Essay of Possibility

May 13, 2013 · Posted in Economic History · Comments Off on Keynes Essay of Possibility 

In John Maynard Keynes’ 1930 essay, Economic Possibilities for our Grandchildren , he comments on the then current “prevailing world depression” and the general feeling of pessimism hanging as a dark cloud overhead. The cloud being filled with joblessness, soup lines, and in some cases, suicide, in response to sudden financial ruin. The aftermath of economic disaster was so tremendous that its destruction created The Great Depression.

Keynes purpose in putting forth this essay was to look beyond the 1930 economic state of affairs, and past the present malaise, to future generations and what possibilities there could be for them. He believed that there were redeeming, underlying trends, buried beneath the rubble of the fallen financial structure; and that these trends pointed to a hopeful economic future in generations to come.

He wrote, “When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals.” One of these moral codes that he put forth, predicated on the assumption that we would one day give wealth accumulation less social gravitas, is the ability to distinguish between, money as simply a possession to be hoarded and spent on things representing status, and money as a means to certain ends, “to the enjoyments and realities of life.”

It seems that Keynes’ 1930 essay needs to be shelved on the fiction aisle categorized under fantasy.

The History of Money

November 24, 2012 · Posted in America, Economic History · Comments Off on The History of Money 

money history

The objects of value that have served as forms of currency, have gone through considerable change over the past 10,000 years.

We began with a barter system, where traded services and resources resulted in an agreed upon exchange of mutual advantage. In fact, individuals, organizations, and governments still prefer to use the barter system of exchange in some cases.

In 9000 – 6000 B.C with agricultural based communities, cattle and other livestock (sheep, camels, etc.) are the first and oldest forms of money. The use of grain and other vegetable or plant products became standard forms of barter in many cultures.

The first use of cowries, the shells of a mollusc, began in 1200 B.C. in China and were also used some time later in Africa lasting well into the middle of the last century. These shells were widely available in the Pacific and Indian Oceans shallow water areas. The cowrie is the most widely and longest used currency in history

China, at the end of the Stone Age in 1000 BC, began manufacturing the first and earliest forms of metal coins with Bronze and Copper cowrie imitations.

Coins outside of China were not made from inferior base metals as were the Chinese coins. The superior coins made in other countries at the time came from silver, bronze and gold. They first were made in Lydia, now present-day Turkey, and quickly copied by the Greek, Persian, Macedonian, and Roman empires. And later in China, 118 B.C., leather money was used.

by Editor

Money Timeline from 800 A.D. to Present:
806: Paper Currency
1500: Potlach
1535: Wampum
1816: The Gold Standard
1930: End of the Gold Standard
The Present:
The Future: Electronic Money
Source: PBS Article


History of VA Home Loan Program

November 11, 2012 · Posted in America, Economic History, Housing, Military History · Comments Off on History of VA Home Loan Program 

On October 26, 2012 the 20 Millionth VA Home Loan was purchased by the spouse of an Iraq War Veteran who passed away in 2010.

The Department of Veterans Affairs (VA) home loan program first got its start as part of the GI Bill of Rights in June of 1944. The GI Bill, officially named the Servicemen’s Readjustment Act, was established to provide benefits for those returning home after serving in World War II.

Besides the government backed, low interest home loans, the bill also served to provide veterans with college scholarships. The legislation was of such immense influence it  is credited with helping to establish the American middle class.


Source: VA Website , Time Magazine

Stock Market Crash of 1987

October 20, 2012 · Posted in Economic History · Comments Off on Stock Market Crash of 1987 

I was in my 20s and working for a small business owner on Black Monday, October 19, 1987. I did not own stocks. I was doing good just to get by on my modest income; this was before finishing college and gaining valuable work experience.

My boss, on the other hand, was in a terrible mood that financially dark, historic day. It was blatently apparent that something had gone seriously awry to everyone who came across his path. He had heard the news. The stock market had spiraled downward dropping 508 points, or 22 percent.

I don’t know how much he had invested, but from his fowl disposition it was substantial and he, of course, was not alone in this predicament. A predicament that had occurred to market gamblers before.


The most notable being The Wall Street Crash of 1929, which included three “Black” days in October; Thursday 24th, Monday 28th & Tuesday 29th. It only got worse from there, when in November of 1929 the market fell from 400 to 145 and over $5 billion worth of market capitalization disappeared from the value of stocks in just three days time.

Sources: List of stock market crashes and bear markets
Factbox: The 1987 Crash, by the numbers

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