The real losses here are somewhere between what they gave him, and what he pretended they'd earned. If you take their investments, factor on top a realistic rate of return in sensible investment strategies, rather than the exaggerate and falsified rate he promised, you come up with a more accurate number.
It goes well beyond the difference between what he said you had, and what you should have had if you invested in someone else...
People make plans based upon their assets. Have a tidy sum tucked away for retirement in Madoff's offering? Good, you can use the rest to risk on a business venture! Suddenly, the Maddoff money is gone, and you are operating without a net. Or maybe you were expecting to pay your mortgage out of some of those investments.
Basically, the sudden loss of expected funds can lead to nasty crash and burns that would not happen if they hadn't been lied to - they'd have planned otherwise, this amplifies the effect and impact of the losses significantly.
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
(no subject)
Date: 2009-03-16 09:05 pm (UTC)It goes well beyond the difference between what he said you had, and what you should have had if you invested in someone else...
People make plans based upon their assets. Have a tidy sum tucked away for retirement in Madoff's offering? Good, you can use the rest to risk on a business venture! Suddenly, the Maddoff money is gone, and you are operating without a net. Or maybe you were expecting to pay your mortgage out of some of those investments.
Basically, the sudden loss of expected funds can lead to nasty crash and burns that would not happen if they hadn't been lied to - they'd have planned otherwise, this amplifies the effect and impact of the losses significantly.