Creative Destruction

“fake some losses”

The key here is not looking just at how well Madoff seemed to perform. It’s how consistently he seemed to be doing it. Stories in both the New York Times and the Wall Street Journal both noted the pattern. According to the stories, he seemed to make a return of 10 percent or 11 percent a year, year in and year out. And it wasn’t just an annual return kind of thing. Almost every month, the WSJ story says, Madoff made somewhere between 0 percent and 2 percent. Hardly any losses, no really outsize gains.

via The Madoff Dilemma | The Big Money.