Bernie Madoff

“Know anything about these people?” Igor slides a folder in front of her. 

“Madoff Securities. Hmmm, maybe some industry scuttlebutt. Bernie Madoff, a legend on the street. Said to do quite well, I recall.”

“One to two percent per month.”

“Nice average return, so what’s the problem?”

“Not average. Same every month.”

“Uh-oh.” She flips pages, has a look at the graph. “What the fuck. It’s a perfect straight line, slanting up forever?”(Bleeding Edge p. 140) 

In this scene, Pynchon is making a historical reference to Bernie Madoff, architect of the largest and most elaborate Ponzi scheme in American history. Though the exact date that Madoff’s scheme began is debated, it is clear that he was running the scheme for decades until he was caught in 2008. Madoff used his scheme to steal upwards of $60 billion. Many reports were made to U.S. Securities and Exchange Commission (SEC) about a suspected Ponzi scheme being run by Madoff. But Madoff was well known on Wall Street and, in fact, helped launch the National Association of Securities Dealers Automated Quotations (NASDAQ) stock exchange, these types of connections helped keep Madoff’s schemes from being discovered. Pynchon puts this reference into Bleeding Edge near the middle of the novel. This is the first time Maxine is meeting Igor, Misha, and Grisha and Igor has brought her a file on Madoff Securities to look over and advise about. Maxine only needs to look briefly in order to tell that something is wrong with Madoff Securities and that Igor should not invest with them. At this point in time, Madoff’s Ponzi scheme is running strong and will not, in fact, collapse for almost seven years.

In 1961 Bernie Madoff founded Madoff Securities with his wife Ruth. Madoff’s father-in-law was a retired Certified Public Accountant and helped to spread the word about Madoff Securities fantastic return rate of ten percent. Celebrities began to invest with Madoff, including Steven Spielberg and Kevin Bacon. Madoff Securities quickly became a family business. Both Madoff’s sons, as well as his brother, nephew and niece all worked for Madoff Securities at one point.

At some point during this time, possibly from the very beginning, Madoff started to run a giant Ponzi scheme. A Ponzi scheme is when someone convinces people to invest in a fictitious idea, then uses the money from those investments to pay other peoples’ returns. No money is made, but it appears that money is made because returns are always paid. Eventually the person running the scheme takes the money and runs. Madoff operated the largest Ponzi scheme in American history, taking over $60 billion from his investors. However, Madoff was caught. In 2008, his sons called the SEC and reported that Madoff was running a Ponzi scheme.

The Bleeding Edge Wiki did not have much information on the topic, it simply supplied a link to the Wikipedia page about Bernie Madoff. I think that Pynchon’s inclusion of Madoff in his story is interesting for three major reasons. First, and most obviously it allows Maxine to show off her skills as a fraud investigator. She was able to look at a file on Madoff Securities and spot a fraud in next to no time at all. This was a test of sorts posed to her by Igor in the story, but it allows the reader as well to realize that Maxine is a talented fraud investigator.

Second, it gives the reader a type of closure (bear with me for a minute, this might seem like a conclusion from nowhere). Bleeding Edge has many stories going at once, but the major plot is following the embezzlement scheme of Gabriel Ice. It’s the whole reason Maxine is investigating anything and that is the reason that reader keeps turning the page, to find out how that ends. Then it simply doesn’t end. Ice is still running his company at the end. Maybe he’ll get caught later, but when the story is over, the reader doesn’t know. This, at least for me, is a huge disappointment. I like to know how stories ends and I was very frustrated that this one didn’t have a definitive ending. That’s one of the reasons I think Pynchon included a brief blurb about Bernie Madoff. Maxine wasn’t able to catch Ice in the end, but she helped with Madoff’s Ponzi scheme. It’s a type consolation prize.

Third, in line with the thought process of my second point. Including a blurb about Madoff gives the reader hope for justice. It wasn’t until seven years after Maxine read Madoff’s file that Madoff was finally arrested. If Madoff can eventually be caught, maybe Ice can as well.

Pynchon includes many important historical references throughout his book. This particular one about one of the most well-known white collar thieves is included for many reasons. The scene is a short one, but the placement and the choice of which criminal to use is deliberate.

Yang, Stephanie. “5 Years Ago Bernie Madoff Was Sentenced to 150 Years In Prison – Here’s How His Scheme Worked.”  Business Insider. 1 July 2014. Web. 23 February 2015.

“Bernard Madoff Biography.” Bio.  A&E Television Networks, 2015. Web. 23 February 2015.

Wasik, John. “Inside the Mind of Madoff: When Did Scam Really Begin?” Forbes. 3 October 2013. Web. 23 February 2015.

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3 Responses to Bernie Madoff

  1. KAK249 says:

    I really enjoyed your post! Very thought provoking! I agree with you in that I was disappointed with the ending of the novel. I too wanted to know more, or at least come to some resolution with Gabriel Ice. The idea of Maxine helping with the Ponzi scheme as a consolation prize does not quite cut it for me… although it is an interesting way to look at the plot. However, I do not believe the plot was the point of Pynchon’s work. There are too many plots in this novel to pinpoint as the main plot. Understanding the world inevitably is a practice in understanding the novel as a whole.

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  2. KeepCalm22 says:

    I thought the idea of the Madoff mention as closure was an interesting angle. I feel like Ice is a direct parallel to Madoff, as Ice is suspected of crimes quite similar. The idea that even though Madoff was still running his company at the time, he would eventually be caught (as most readers of this novel would most likely know from common knowledge) does foreshadow Ice’s eventual collapse as well. I think it may be important to note that Madoff’s own sons turned him in. In the case of Ice, perhaps family could be a part of his final demise in the security industry as well. Given that he did not have the most respectable parting with Tallis, and given the fact that Tallis is March’s daughter, a woman who seems hellbent on taking Ice down, could be another hint that Ice’s days embezzling money could be numbered.

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  3. newtonscradle7 says:

    Agreeing with KeepCalm22, I definitely think using Madoff as closure is quite interesting. The novel’s ending did not provide much closure, and speaking for myself, I was not that satisfied with the ending. The idea that Gabriel Ice may be like Madoff in that maybe down the road he will get what is his and be caught, would be more satisfying. This provides a good sense of an ending from a storytelling standpoint. I am sure many of my fellow classmates would agree that the ending was not what we were looking for. This hope that Gabriel Ice will get caught sometime in the future can give me a bit more of an end to the story. Great angle!

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