Many Ark readers are by now probably familiar with infamous money manager Bernard “Bernie” Madoff. He was big in the news a few months ago and got some more attention recently when reporting to prison. Madoff made off with LOTS of other people’s money by perpetrating a huge “Ponzi” scheme. As a public service, The Ark of Mark wants to make sure readers fully understand the nature of “Ponzi” schemes so you will not be vulnerable.
First things first. The “Ponzi” scheme got its name from famed Happy Days television character Arthur “Ponzi” Ponzarelli. Ponzi was the white T-shirt and leather jacket-wearing high school dropout who menaced local teens before somehow evolving into a respected community figure. Ponzi inexplicably maintained an imposing physical presence despite being slightly built and about 5’7” tall. Such was his natural leadership ability that nobody found it odd or even slightly creepy that a thirty year old man would regularly conduct sensitive meetings with teenagers inside the men’s room of a local diner.
Now let’s compare and contrast the financial Ponzi scheme with the original.
In a financial Ponzi scheme, unwitting investors hand over hard-earned money to an investment manager. The manager promises big returns without offering any information about how he is able to provide them. Returns are paid to investors not with actual investment earnings but by using some of the money paid in by subsequent investors.
In the original Ponzi scheme, unwitting teenager girls in poodle skirts sacrifice their hard-earned reputations by commiserating with the Ponzi fellow, often visiting him in groups in his small apartment atop the garage of a good-natured, naïve family. The scheme includes a bizarre 1950’s ritual called “necking” which most historians agree is somehow related to the fashion trend where boys of that era would wear their shirt collars flipped up around their necks. The power of the original Ponzi scheme is such that victims under its spell can be summoned with a demeaning staccato snap of Ponzi’s fingers.
(The financial equivalent of the finger-snap is most likely a simple phone call to a potential victim from a friendly investment “advisor” with a carefully practiced discipline to suppress evil giggles).
I hope this clears things up for everyone. The Ark of Mark urges its readers to invest only in solid, time-tested methods. I’ll let you know when “The Ark of Mark, Inc.” goes public.