According to Robert from FalseProfits.com, we now have the elements for a perfect storm in which Pyramid Scams and Ponzis will flourish.
– Many new investors desperately seeking income or cash due to job loss and depletion of savings and housing values.
– More and more disguises for scams — hedge funds, “direct selling”, ??usiness opportunity?? etc.
– Weak regulation
– Declining public faith in the job market, corporate America, banks and Wall Street.
– Declining understanding of the public about the nature of endless chain or Ponzi fraud. This declining understanding is also reflected in the media. Many journalists do not understand why pyramids are illegal or see the endless chain model as just another example of a buyer-beware marketplace. Many also don’t understand the exponential math used to trick consumers into thinking everyone has an actual chance to recruit a “downline” on which they can gain commissions. They therefore don?? grasp the nature of the fraud. (With each person recruiting just two other people, the continued expansion would saturate the earth in about 30 recruitment cycles.)
I have no doubt that this is equally applicable to the situation here in Malaysia, especially when it comes to the part of investor confidence in local stock market, where wild speculation is rampant.
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That's life, when something is too good to be true, we tend to believe it is true, and the logic is always your good friend is indeed making money from the get quick scam, you jump the band wagon, you make some,you tell your friends,and they make some.
and in the end, the one who got burnt, they called it “minority”
Comment by eugene — February 2, 2009 @ 4:04 pm
At the same time, we are going to see more and more ponzi going down. Madoff like schemes always face problem when they have to return funds to their investors. With the current run for safety, we'll see more and more ponzi going bust… While new, more creative ones, will take advantage of the new situation.
As for the “minority”, I'd say it is the contrary, the way a ponzi work always get the base of the pyramid to swallow most of the losses. Hence the majority always lose. Even more so when governments have to step in.
Comment by Jacques — February 2, 2009 @ 6:02 pm
I am surprised. How those ponzi schemes are any different from the entire financial system especially that of wall street and the Federal Reserve's fractional reserve banking ?
Big crooks vs small crooks, everyone in the finance sector is a crook. The entire financial system is a big fraud ponzi scheme. We need a financial revolution. Finance and economics is the biggest conjob of the century.
Comment by ShadowFox — February 2, 2009 @ 10:16 pm
true enough, but then again, the reason why scam like these can spread so fast is because they do fall under the grey area … with the right intention, a good MLM is strongly encouraged by both goverment and business bodies, but when twist slightly to another angle, the whole thing go kaput and become a scam … as long as gambling is around, scam would live around it.
Comment by mtsen — February 4, 2009 @ 12:38 pm
i hate the scam word, so during this economy , we must be careful since this is great time for them to cari makan
Comment by imDavidLee — February 10, 2009 @ 8:00 am
Yup…..We must more careful…….Now a lot of Crocodiles around us…….
In this world no free lunch at all…..
Comment by Max8 — February 17, 2009 @ 1:27 pm