Maddoff Workout at the Gym
February 14, 2009
A few weeks ago as I was in the locker room of the gym where I work out, putting on my exercise clothes, a man of about 60 years of age with a bushy white mustache came out of the shower room. As he bore a striking resemblance to photographs of Mark Twain, I will refer to him as “MT.”
Another man, I will call X, already in the locker room, obviously an old friend, greeted MT, in a matter that struck me as celebratory, (Perhaps they were planning to get together to celebrate some significant date important to both of them.)
However, MT was clearly not in a mood to celebrate. He began to explain to X that he had just discovered that he had lost his life savings to Bernard Maddoff.
Soon everyone in the crowded locker room was listening to MT’s unhappy tale with rapt and horrified fascination. He related his harrowing yarn with rueful humor and a sad, wry expression on his face. I could envision the great humorist Samuel Clemens telling his tale of losing a fortune investing in an attempt to invent a typesetting machine with with the same bitter amusement and bemused expression.
MT related how after working his entire life as a carpenter and a contractor, he had paid off his house entirely and saved over a million dollars toward his retirement. As his back and neck were damaged from a lifetime of hard manual labor, MT was looking forward to a comfortable retirement without having to endure any more hours of painful physical strain on his weakened frame.
MT put all his retirement money in a fund sponsored by Bernard Maddoff. His reasons for doing so were similar to the reasons we have heard from many other people: Maddoff’s vast experience as a successful investor, immense reputation as an innovator of investing technology, and his long involvement with many impressive Jewish charities all gave MT considerable confidence in Maddoff as an investor. (I inferred that MT may also be Jewish, as are quite a few of Maddoff’s other victims)
As with so many other people, Maddoff’s sterling reputation led MT to invested all his liquid resources in Maddoff’s fund. It was obvious that MT was financially literate and had some experience with investing. Familiarity with investing of a characteristic of many of the people who lost fortunes investing in Maddoff.
MT took a bit of a consolation in comparing his situation to others in our community. “I know at least six other people on our end of the island who also lost all their money by investing in Maddoff,” he told us. “One person has already filed for bankruptcy. At least I own my house free and clear.”
However, even this consolation was quite limited. “I went to the bank and tried to borrow some money on the equity in my house. They turned me down as I have no source of income to repay them.” Unspoken but in the air was our knowledge of our nation’s financial crisis, based around the collapse of the real estate market and the freezing of the credit mechanisms of our economy.
“I am 60 years old and my neck and back are ruined from a lifetime of physical labor. I was looking forward to a comfortable retirement. Now I have to go back to work. I’ve been earning some money as a painter, but even that work is hard for me to carry on for more than an hour or two.”
Someone in the locker room had a suggestion. He had heard that there was a large demand for house inspectors because so many homes are being foreclosed and need to be evaluated by those taking possession. “I can do that kind of work,” said MT, though he sounded doubtful about there being such a convenient option available to him if he had to work. “I should look into it.”
It’s one thing to read about this calamity in the news or listen to it on a broadcast. It’s striking and poignant to hear about it first hand and look into the eyes of someone experiencing it.