Chapter 1. On the Road

When we (authors Daniel Strachman and Richard Bookbinder) started working on this book, all was right within the world of hedge funds, fund of funds, and alternative investing. Sure, there had been some hiccups—the credit crisis that started in the spring of 2007, the fire sale of Bear Stearns, the pending collapse of Lehman Brothers, to name a few—but nothing prepared us for the news of December 11, 2008.

While December 7, 1941, was a day that will live forever in infamy, many on Wall Street and beyond believe that December 11, 2008, was one of the worst days of all time. It was on this December 11, as the markets were closing on Thursday afternoon that the news broke that Bernard L. Madoff had been arrested for a massive Ponzi scheme. I (Daniel) remember exactly where I was sitting and what I was doing when Richard called me on my cell phone with the news of Madoff's arrest. Both of us were shocked, but as on December 8, 1941, when reports of the extent of the Japanese attack on Pearl Harbor began to come to light and F.D.R. made his famous speech, the news of the extent of the crimes Madoff had perpetrated on the thousands who had invested with his firm was simultaneously shocking, sad, and funny.

It was shocking because the initial reports named some of the most respected money managers and investors in the world. It was sad because the world learned that people had literally given Mr. Madoff all of their money and were now penniless. It was funny, maybe ...

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