«WASTING MONEY PUTS YOU IN A REAL PARTY MOOD» -ANDY WARHOL

So Madoff got the brilliant idea to start a money management business on the side. He didn't charge any fees, explaining that he would just make money trading stocks on the securities side of the business. Merrill Lynch (nyse: MER - news - people ) and every retail brokerage player perfected this business model years ago--it's called churning. And the gerries fell for it. Now, all of a sudden, Madoff is a macher (a big shot, a mover). The ability to make someone money moves you to the top of the cocktail-party list. Madoff didn't advertise; he kept it exclusive, adding to its mystery and allure. And he didn't swing for the fences, he "produced" tortoise-like (steady) returns: 13.72% one year, 9.82% another. Goldilocks-esque. Not too hot or cold, just right.It became known as the "Jewish T bill." Never mind that his option split strike conversion strategy was completely bogus.

Forbes
Dec 16 2008