Vicki Robin

Madoff and Chinese Laundries

In Uncategorized on December 19, 2008 at 6:33 AM

Someone pointed out the irony of the name Made-Off, as in he made off with your money. Joe Dominguez warned again and again about amateurs putting their money in the stock market, especially when a broker or your brother Harry says he has a “sure thing.” He used to tell a story about one way they knew the top of the market had arrived back in the days when technical analysis was a baby chick and computers were the size of a city block.

Chinese immigrants flocked to Chinatown in lower Manhattan. Historically, Chinese immigrants in this country had very few choices when it came to their profession (They were legally barred from doing anything besides laundry or railroad work in the 1800s) so they mostly ran laundries or restaurants. Conservative and isolated by language, they mostly kept their money in the mattress or a box under the bed. But the Chinese are canny and watch for deals so from time to time, when the market seemed to be on an endless climb, they’d load their money into laundry sacks and show up on Wall Street to buy. With no experience in the market, however, they’d pretty much come out of the woodwork just as the market topped. So they used to say you knew the top had come when the Chinaman shows up with a bag of money. (Sort of like knowing the opera is over when the fat lady sings). Somehow seeing so many innocents – good people doing very good things for the world – go down in the Madoff meltdown reminded me of that story. When people who know nothing about the market finally get in there because everyone is, the smart guys are, as Joe used to say, getting out.

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  1. You could make this story a lot less racist-sounding by acknowledging that historically, Chinese immigrants in this country had very few choices when it came to their profession. (They were legally barred from doing anything besides laundry or railroad work in the 1800s.) Also lacking fluency in English or a cultural understanding of how banks work would probably make you hesistant to put your money into them. Making the choice to keep the money in their home rather than entrusting it to a bank is less about being suspicious, and more about being careful.

    Just a tip: you could have probably dispensed with the first two sentences of that paragraph alltogether, and not had to preface the story with an apology to begin with.

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