Monday, January 19, 2009

Madoff Investors and White Shirts

It's becoming fashionable for Madoff investors to share their stories. One investor, Alexandra Penney, shares her tale of woe here.

For the thousandth time, the lesson is “diversify”:

More than a decade ago, when I was in my late 40s, I handed over my life savings to Madoff’s firm...

It's also clear the elite were the ones connected to Madoff:

I was brought up in very comfortable circumstances in a Waspy Connecticut suburb. My mother was a descendant of Greek royalty, an intellectual grande dame who wore elegant shaded glasses. But my father, a Greek immigrant, was a product of the Depression. He was a smart, strict Harvard lawyer who had seen bad times...I asked around and talked to my smartest friends with Harvard and Wharton MBAs. There appeared to be a secret society of Madoff investors. A friend who was older, wealthier, and more established somehow got me in.

It's still difficult to identify with Madoff investors, partly because there's an element of self-exploitation involved. Ms. Penny, for example, uses her article to promote a sex book she wrote years ago. She also unconsciously reveals how insulated she is when she talks about her forty white shirts, ironed by an immigrant named Yolanda:

I wear a classic clean white shirt every day of the week. I have about 40 white shirts. They make me feel fresh and ready to face whatever battles I may be fighting in the studio to get the best out of my work.

The language is shockingly out-of-touch. "Battles" fought "in the studio"? Is she forgetting that Americans, mostly poor and middle class, are fighting real battles right now? Also, who has 40 white shirts? I'm an attorney, so I actually need white collared shirts. Yet, I own only three--one from Gap (GPS), one from Macy's (M), and another from Nordstrom (JWN). I also specifically look for "wrinkle-resistant" shirts to save money on drycleaning.

Other readers picked up on the "white shirt" phenomenon, too--here's a comment from "Hammett":

Hey, you're worried about clean white shirts. So, you're going to have to learn how to iron and stand there until your back hurts, like most people. That's life. Get off your [arse], and get to work. And stop feeling sorry for yourself.

More on Madoff here and here. Public outrage isn't going to go away anytime soon. Scott Burns, one of my favorite finance writers, received 3,000 emails/letters when he asked readers how Madoff should be punished. What do you think, readers? What would be an appropriate punishment for Madoff?

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