Today’s Machining World Archives March 2011 Volume 07 Issue 02
The New York Mets ownership group is trying to sell 25 percent of the team because they are being sued by the attack-dog lawyer representing the victims of Bernie Madoff. The lawyer, Irving Picard, claims that the hedge fund operators who own the Mets realized huge “profits” from Madoff and should have known he was running a Ponzi scheme.
This brings up an idea I have been thinking about for a long time, the “fiction of money.”
In our Graff-Pinkert & Co. machinery business we are often asked to do appraisals of machinery, usually for financial institutions or consultants. We had a call recently from a consulting firm who wanted prices on a group of National Acmes. “Make the prices on the high end,” he requested. We said we would give him information for a fee. “Oh, I didn’t plan to pay for information,” he said. Real pulp fiction writer.
But so much of what masquerades as fact is bogus when it comes to money.
What happened to the trillions of dollars lost in the real estate meltdown of the past few years? The value of the mortgages and bricks were a fiction that evaporated in a few months.
The values of stocks are a fiction, too. General Electric Corporation is the same company at $50 a share or $10.
Accountants fret over financial statements like they are stone tablets, but they are often more interested in being legally bulletproof than reflecting the health of the business they audit.
So Bernie Madoff goes to jail for his Ponzi scheme, but unknown thousands of financial fiction artists run free because the system requires universally accepted fictions to operate smoothly.
I am at home in this world of ambiguity because I see it as a useful sham that lubricates the flow of money. I think our readers like to live in the world of “facts,” of chips and index times. Hopefully TMW can bridge the gap between the fictions that shape our lives and the “facts” from which we think we earn our livings.
Lloyd Graff
Editor/Owner
