Thoughts of Bernie Madoff

NY magazine writer Steve Fishman had been working on a piece about the jailed scamster when he was able get someone to pass Madoff a letter. Then, a few weeks ago, his phone rang: "You have a collect call from Bernard Madoff, an inmate at a federal prison," a recorded message announced. Madoff apologized for calling collect. "I don't have that much money in my commissary account," he told Fishman. Bernie started talking about his life, his family, and his business. Some nuggets:

"I was perfectly happy to take the crumbs," he said. Madoff was a market-maker, a middleman between those who wanted to buy and sell small quantities of mostly bonds--odd lots. "It was a riskless business," he said. "You made the spread," buying at one price and selling at a higher one, and in those days the spreads could be substantial, 50 or 75 cents or even a dollar a share. Madoff increased his profits by trading on the side. "And I had my niche." By most accounts, Madoff had a trader's instinctive understanding of the market. He was an "unbelievable trader," said a person who watched him in the eighties.

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Madoff started borrowing from his investors' capital to pay out ... solid returns. The returns, false though they were, were their own advertisement. New money started pouring in, saving him in the near term. And this was a different sort of money, the kind that came from bankers who wouldn't have given Madoff the time of day earlier in his career. "The chairman of Banco Santander came down to see me, the chairman of Credit Suisse came down, chairman of UBS came down; I had all of these major banks. You know, Safra coming down and entertaining me and trying [to invest with Madoff]. It is a head trip. [Those people] sitting there, telling you, 'You can do this.' It feeds your ego. All of a sudden, these banks which wouldn't give you the time of day, they're willing to give you a billion dollars," he explained.

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Ruth was torn by Madoff's confession, her emotions complicated by 50 years of marriage. "She was mortified by what I did," said Madoff. "We had a very luxurious life. There's no question about that. But that was not what she was interested in. She would have been perfectly happy if I'd been a teacher. My wife, quite frankly, doesn't forgive me for what I did. But at least she understood. You know, I guess, they say for better or for worse," he explained and gave that tiny laugh. "Better and worse. She stood by me. She's my wife."

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Madoff says he was devastated by the death of his son. "Let me tell you, I cried for well over two weeks. I cried and cried. I didn't come out of my room. I didn't speak to anybody, and so on. I have tears in my eyes when I'm talking to you, even. Not a day goes by that I don't suffer. I may sound okay on the phone. Trust me, I'm not okay. And never will be." He was on suicide watch; the guards looked in on him every hour. But they needn't have worried. "I never thought of taking my life," he told me. "It's just not the way I am." After a few days, Madoff forced himself out of bed and back to his job filling inmates' commissary orders.