ajtj99's Market Pulse

[arjunah]

Yes, Montana, every single penny! Unless Madoff converted deposits into cash and burned it, every single penny is around somewhere. The feds found about a billion in his accounts. Lots of the money went into his lifestyle and charities he supported. Most of it probably went to the hedge fund and feeder fund managers. Some of those guys were paid tens of million a year!

The person who paid a million for $100K home? Well the seller has that million. And the condo seller has that borrowed $600K. The lender is out $600K less whatever the condo fetches but that $600K given to the seller hasn't disappeared. And the CMOs? Well, that's Neutral Man's "greater fool" theory, and the last fool buyer of the CMO is the one left holding the empty sack. But the money he paid for it hasn't disappeared, the second to last lesser fool has it

See! Everything is accounted for, to the penny!!

The only "wealth" that has disappeared was paper gains that never "really" existed. When a stock hits a new high of say $100, all of the shareholders value their networth at that level, but they can not all sell at the level (unless there is a buyout at that price). The only real value of their shares to them is what they can realize when they sell them. Until then, its just a paper gain, and, as I've explained, when those paper gains evaporate it does not destroy or transfer real wealth.