Douglas A. McIntyre anticipates others following Barnard Madoff's path.
They are the biproduct of rapidly rising wealth, narcissism, vanity, and the naïve assumption that the very smart and very rich never make bad judgments.
Several analysts have written that one-third of the 10,000 or so hedge funds will fail or be merged out of existence. That means many wealthy hedge fund managers and their clients will be losing large sums. Both the people who run the investment pools and those who invested face the deep shame of poor decisions. They will put off having to face the consequences as long as possible. That means that some will hide the results of bad investments and hope to double down and get back the money they have lost. At some point, the kitty will be empty and it will be confession time.
Hat Tip to John Quiggin at Crooked Timber