Anatomy of a scam

The Torres 'scheme' promised 2%, 3% to 11% PER WEEk return. 

At 2% it means that your money would roughly triple in a year, at 3% it would be almost five times and at 11% your 1 lakh investment would become two crores in a year. 

While some of the victims were uneducated, a big proportion was not!

Sure, the scamsters did the con, but wasn't the greed of the 'common person' also to blame?

Reminds me of the anatomy of a bubble/ scam explained in John Kenneth Galbraith's 'A Short History of Financial Euphoria'

Here is the pattern

- In the euphoric phase, every member of the mob believes they are smart and all the money being made by them is well-deserved.

- While the euphoric phase is on, those skeptical about the scheme are hated. They are called stupid for not making money, accused of having ulterior motives and so on.

- Even those who see the problems jump in, thinking they can get out ahead of the crowd.

THEN comes the burst - which always comes with a bang...it's never a slow grind. Thus, all those who planned to exit also can't. 

Following on its heels is the blame game

- Some heads have to be sacrificed: whether of corporations/ other entities or people.

- What remains sacred or sacrosanct are markets and the 'common' speculator. They are never blamed...but maybe they should be.

It is a willing suspension of disbelief on their part.

And of course as the cliche goes, "If it sounds too good to be true, it probably is"