Is the fix in?

Reading the following by Karl Denninger, I got to thinking about my reaction to seeing Bernie Madoff hounded by reporters on the street and his being escorted in and out of the court house. I am always struck by the curious equanimity he displays, an almost Alfred E. Neumann-like “What, me worry?” affect. For someone who’s royally taken a large number of people for astronomical sums of money and faces, so we’re told, a possible life sentence, this is a man who is remarkably calm about his prospects.

Moreover, I don’t recall that his troubles suddenly manifested themselves over a 12-hour period catching him flatfooted. With, I presume, no small amount of cash at his disposal, did he not consult in the distant past with competent legal counsel on the issue of possible extradition free havens? Did he not have a contingency plan that involved something more sophisticated and effective than trying to transfer some of his assets to his wife (and relatives, if my memory serves me)?

I’m not one for conspiracy theories and do not know how prescient Mr. Denninger is. But in my view Madoff is one cool customer, strangely so, and if he is indeed as cool in fact as he seems, it could be that he knows very well that he has little to fear for the reason that Denninger sets out.

His sentencing is today and we will get an initial read on this from the outward severity of the sentence. If the sentence is lengthy, then it will be interesting to see where Madoff is sent and what conditions he will face when he gets there. Parole is also a possible exit from his predicament.

That said, here’s Mr. Denninger’s view that Madoff operated with the explicit assistance and cooperation of the U.S. government:

At best Madoff is a 20+ year scam that occurred with not only the intentional blindness of our government but its explicit assistance and cooperation. It is simply not possible for one man to run a Ponzi Scheme of this size, sending out statements every month to hundreds if not thousands of clients and employing a group of people, moving this amount of money around, and have the entire thing be a scam without the cooperation of literally hundreds of accomplices including accomplices inside regulatory agencies and the government itself, along with regulated entities including the banks that lost money. You cannot place that sort of capital as a bank or other regulated entity on nothing more than "trust" - no matter who its being placed with. There is much, much more to this scandal and you can bet the people involved will do their level-best damndest to keep the truth from coming out.

True. I may be reading too much into what I perceive in Madoff. Maybe he's just not that bright, not that foresighted, and just resigned to his fate and Denninger is making something out of nothing.

Perhaps. But I doubt that Madoff is stupid.

"Where We Are, Where We're Heading (2009)." By Karl Denninger, The Market Ticker, 12/31/08.

UPDATE: Well, scratch that theory. Madoff was sentenced to 150 years in prison today. It looks like he was just resigned to his fate after his fraud became unsustainable. Denninger's point is still on the table, though. How could fraud on such an immense scale have gone on for so many years without the complicity of a great many people? Maybe "the fix" will be evident in the small circle of people who are made to pay a criminal penalty and eventual revelation of a very limited version of the facts.