Where is the $50 billion Bernie Madoff claims to have lost?
Clearly, some of it went to the guys running the feeder funds, like Walter Noel, but that doesn't appear to add up to close to $50 billion.
There are two kinds of Ponzi schemes: the kind where you do some investment that can't pay off in the long run and the kind where you don't do anything at all and just pretend to invest it. Harry Markopolous demonstrated that Madoff couldn't be actively pursuing the "split-strike" option strategy he claimed to be following because not enough of those types of options were traded in the whole world. So, was Madoff doing anything with the money other than paying it out to earlier investors?
Perhaps he recently started making wild bets in the markets to try to get back to even. But where is the documentation for these trades?
Or do he and his loved ones have it socked away somewhere? So far, his houses and yachts that have surfaced sound like those of a man with hundreds of millions -- but not tens of billions -- of dollars.
It's a $50 billion puzzle ...