Granted, Marc Faber lost the official LOLFed Dr. Doom Poll to Nouriel Roubini, but I will continue to refer to Faber as Dr. Doom until someone can suggest a better pet name. Found this gem on the Lew Rockwell Blog:

Peter Schiff, president of Euro Pacific Capital in New York, also raised concerns about the SEC’s auditing of the firm. “Of course, the fact that the SEC routinely audited Madoff’s investment company and found nothing wrong is further proof that government regulation of the securities industry is ineffective and has done more harm than good,” he said. “Rather than protecting investors, it merely lulls them into a falls sense of confidence. If government stayed out, private-sector due diligence would do a much better job of ferreting out such massive and poorly conceived scams.”

In general, I prefer to leave all regulating to Nate Dogg and Warren G, but as long as we have an organization that supposedly regulates financial firms, it would be nice to see them actually doing so. I do, however, like Peter Schiff’s theory that in the absence of a SEC, Tinsley Mortimer herself would have poured over Madoff’s balance sheets and declared something rotten in Denmark. For now, however, I will simply refer to Chris Cox as “the guy who lets more slip past the goalie than Kevin Federline.”

Also, if you click through, you may notice they made the same “Madoff with other people’s money” joke we made a few days ago, and thought it was original. Must not be readers of ours.

ETA: This FTAlphaville piece is interesting. Apparently, one firm, Aksia, examined Madoff’s auditing company and found them horribly insufficient and Madoff’s methods suspect:

The feeder funds had recognized adminstrators and auditors but substantially all of the assets were custodied with Madoff Securities. This necessitated Aksia checking the auditor of Madoff Securities, Friehling & Horowitz (not a fictitious audit firm). After some investigating we concluded that Friehling & Horowitz had three employees, of which one was 78 years old and living in Florida, one was a secretary and one was an active 47 year old accountant (and the office in Rockland Country, NY was only 13ft x 18ft large). This operation appeared small given the scale and scope of Madoff’s activities.

There was at least 13bn in all the feeder funds, but our standard 13F review showed scatterings of small positions in small (non-S&P100) equities. The explanation provided by the feeder fund managers was that the strategy is 100% cash at every quarter end.