NEW YORK - When a Sri Lankan expatriate invites his friends for a family wedding in the US these days, he is likely to provide two options on the invitation card. The request is to check one: ( ) will attend or ( ) unable to attend (read: lost all my savings with Madoff and/or Kotelawela?).
The joke is already doing the rounds in the Sri Lankan expatriate community. But no one knows for sure how many Sri Lankans living in the US invested, directly or through proxies, either with Madoff or Kotelawela, or with both.
Madoff, of course, is Bernie Madoff whose investment scam, generating astronomical interest rates, drew thousands of investors who eventually lost all their monies, including savings, when the entire financial edifice collapsed (much like the Golden Key Credit Card in Sri Lanka).
The total losses in Madoff's fraud are estimated at a whopping $65 billion (that's billion, not million). But most of the investors, primarily the rich and the super-rich, say their lifetime savings have just vanished from the face of the earth leaving them in virtual poverty.
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| A protestor holds up a sign resembling a cheque as he rallies outside the AIG building in Los Angeles on Thursday. The action was part of a national protest against major U.S. banks and firms with participants calling on Congress to take action on employee free choice, health care, and banking reform. Reuters |
Described as the biggest single fraud in US history, the Madoff swindle comes at a time when the American economy is taking a heavy beating with a spreading financial meltdown in Wall Street.
The underlying factor apparently was greed with a capital G because most of the investors, who collected high interest on their capital, re-invested their earnings in the hope of making more money.
At age 70, Madoff is now awaiting sentencing — perhaps to spend the rest of his life in prison. There is hardly anyone shedding tears for the man they call the "master swindler" even as his hate mail has been piling up.
But this multibillion dollar scam is only part of a spreading economic malaise that has not only jolted the US but also the rest of the world, specifically Europe.
When Iceland became the first country in the world to declare itself bankrupt, there were reports that the European nation was up for sale on E-bay for the highest bidder. But it turned out to be a cruel joke reflecting the current economic environment in Europe.
Iceland, however, is not alone. The next wave of financial crashes is expected to hit Eastern Europe, including Hungary, Romania, Latvia, Lithuania, Estonia and Ukraine.
But if these countries do fail, the repercussions are expected to be felt mostly in Western Europe, particularly Austria and Sweden, whose banks have been lending huge amounts of money to these cash-starved East European nations. The Austrian government has already offered a $130 billion bailout package to save its own banks from going belly-up.
In the US, the most recent uproar is over the $165 million in bonuses paid to executives of AIG, an insurance company, which received $173 billion in government bailout funds. In general, bonuses are paid to employees who contributed to the financial successes of companies and multi-national corporations. It is part of the ingrained culture in Wall Street.
But there is absolute outrage — both from the public and from politicians — over the decision of AIG to pay such massive bonuses to employees who may have been responsible, directly or indirectly, to the failed policies of that company.
President Barack Obama has expressed anger and disbelief that any company could get away with such an outrageous scandal. At least one angry Senator said that it would be most acceptable if executives of the failed company should follow in the footsteps of the Japanese, who as part of their culture, either publicly apologize for their sins or commit suicide.
Meanwhile, the wheelbarrows full of money that have been shovelled into failing banks and Wall Street companies have triggered a wave of virtual "nationalisation" and government takeovers, prompting charges that the US, the citadel of Western capitalism, was drifting towards a form of socialism once prevalent in the former Soviet Union.
Former Governor Mike Huckabee, a Republican who made an unsuccessful bid running for president last year, said rather sarcastically: "Lenin and Stalin would love this stuff."
And, not surprisingly, right wing neo-conservatives, who are diehard supporters of capitalism, are mockingly calling the US President "Comrade Obama." If current trends continue, they fear the birth of the Democratic Socialist Republic of the United States. | 
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