The fear of becoming a bag lady is just that; a fear of losing everything in a heartbeat. This abject fear has generally been conjured up in terms of a woman becoming widowed or suddenly divorced. So enter being "Madoffed" as a new cause of a bag lady fear.

Recently we’ve read the story of Alexandra Penney who is blogging her plight in The Bag Lady’s Papers. Check out the article here -- Life savings gone -- 'Madoffed' best-selling writer back at work While she admits to owning other significant illiquid investments (prized jewelry and real estate) she apparently invested nearly the whole of her financial investment portion of her "life savings" with Bernard Madoff, the self-professed, current day Ponzi Scheme* architect. She and thousands of Bernie Madoff’s friends, and friends-of-friends had mistaken Madoff as a trusted financier. Yet it turns out, he actively bilked thousands of individuals, foundations, and corporations out of what some estimate to be sums totaling 50 billion dollars!

Ms. Penney is a mature author and artist who has penned several installments of her personal diary, depicting her horror and angst at being "Madoffed". That statement implies that she has had something DONE to her, and it would follow in most people’s minds that she therefore is a victim. Well, hurt she is. Damaged she is. A victim she is not because she is already writing about her response.

We would no more actually imagine Alexandra Penney shuffling around as a literal bag lady, than we would picture Queen Elizabeth serving up fries with a super-sized meal because of their status. While Ms. Penney is surely not a Queen, her best selling author status commands respect and will ensure rapid success, as it should. That said, I believe her story is still a very important one, especially for mature women everywhere.

Indeed so many fears are unfounded, yet when a fear is realized, or perceived to be realized, it’s shocking and more than unsettling; the earth moves under your feet. Your mind races to the extreme negative, the absolute unimaginable: newspaper-crammed holey shoes pushing rusty, absent-a-wheel shopping carts, huddled together with perfect strangers to survive sub-zero winter nights.

Thankfully, what emerges eventually is a sense of degree, a sense of perspective. While there are indeed FAR too many actual bag ladies (and bag men) alive and somehow surviving, the bag lady fears of most of us are often blown up-- like Ms. Penney’s and her dolls. We need to figure out singularly and together—remember Obama urging us to all pitch in?—how we can avert the most drastic of circumstances; becoming saddened, disheartened souls grasping onto life with white-knuckled fears.

I have delighted in Ms. Penney’s exquisitely languaged blogs and share her horror that Madoff isn’t behind bars! What drugs are our law enforcers and judicial system on that would allow them to release Madoff on such a measly bail in the first place, and then upon his defying bail rules continue to uphold his freedom?

You may be interested to know that Charles Ponzi jumped bail and fled twice! Minds like these don’t stop upon their initial arrest folks. It’s time we organize a "jail Madoff" picket line protest around his posh Manhattan block and force the lazy hand of our government to take far overdue action NOW!

No, that won’t replenish countless investment accounts, or put charity’s staffs back to work, or even allow some rich folks to raise another martini toast, but it would certainly send the kind of signal that all Americans are looking to see. We’re waiting for our jails to be overcrowded with Wall Street, Banking, & Car Industry executive crooks. Crooks who in their self-aggrandizing profit-driven madness, eschewed fuel efficient cars, feasted upon uncreditworthy applicants, and gorged themselves on indefinable, packaged investments. We’re looking for elected officials and corporate leaders to embody justice for all, not justice for "just us". We need to breathe new life back into capitalism, and hopefully close the chapter on cannibalism once and for all!

I am tired of the "old boy" networks, which grossly enrich each other with a simple wink atop Pebble Beach’s 7th hole or 50,000 feet above most of our realities in their posh Learjets, or texting on their Blackberries to buy into the next harebrained idea, built on a house of cards, and not able to be disclosed in any written or comprehensible document.

My limited knowledge of Madoff was that his investments continuously returned FAR superior returns to those of the "markets" and were absent any periods of negative returns. Those two characteristics should have been a red flag to anyone daring to look. Daring, I say because it takes intelligence (or guts) to imagine downturn amidst skyrocketing returns. It takes real discipline to plan for a rainy day when all you’ve experienced (or chosen to remember) are the sunny ones. Yet even squirrels collect acorns in times of plenty preparing for harsh winters sure to follow.

Every marketable investment suffers periods of loss or negative return because the markets naturally operate in cycles. So, the mere absence of any negative returns should have given investors pause. It should have eventually given the SEC pause too, but that’s fodder for yet another story.

I’m not jumping on the overcrowded stupidity-of-putting-all-your-money–in-one-place bandwagon here. Many folks legitimately have all their money invested in one Mutual Fund Family in order to save on management or fund expenses, etc. Rather the grandiose mistake is about putting all your money in one exclusive, members-only kind of 'deal'.

Mutual funds’ third party custodians hold the mutual fund assets, unlike Madoff holding the once-famed Madoff Fund’s assets. Mutual funds also publicly disclose their investments at least quarterly, and own shares of individual stocks and bonds, each of whose price can be verified several times each day. I have no time for investments with anyone—regardless of the marquis name—in which there is no such disclosure.

Hedge funds came into their own with exactly that "secrecy allure", so to speak. 20 something yr old wet-behind-the-ears hotshots royally confused brains with bull markets years ago. They resigned from once prestigious Wall Street firms and the lowly 2 million dollar bonus plans (atop their 1 million dollar base salaries, meaty stock options, and the like) to form their own hedge funds. People clamored to "get in" to these fat-with-excessive-fees schemes. I knew we were all in trouble when Money magazine’s cover trumpeted hedge fund investments.

Hedge fund managers fiercely fought regulation by the Securities & Exchange Commission. They attested that disclosure of their "tactics" would be detrimental to their success. Like someone may have been able to spot (and jail) Madoff before he madeoff with so many zeros?

So I implore us to refrain from plastering Ms. Penney with all our collective angst and feelings of loss because, as she implied, we are all in this national financial carnage together. The sooner we appreciate that pain is pain—perceived or real bag lady or Person of Reduced Circumstances status not withstanding--we will be able to collectively rise to the top, as a nation and as a global society.

I don’t remember any drowning person inspecting a life raft to see if it bore a Republican or a Democrat insignia, or was hurled by a rich socialite or a bag lady. They furiously grab for the life raft, fight like hell to survive—whatever that means to them—and hopefully get around to thanking the person who hurled them one tool of survival.

No one can know where Ms. Penney will go with her new education, and her new still-fresh wounds. I can only suspect that with her self-made know-how and creative can-do attitude, she will indeed resurrect herself. In so doing, she will show us all examples of how we can regain our footing and confidence as well. I further suspect that she will share some of her wealth with organizations that lend a hand-up to those less fortunate--those women in particular who lack the "back-up" assets that Ms. Penney fairly admits will buy her some valuable time.

Curiously, I can’t stop thinking about her last name. Ms. Penney isn’t Penniless literally. This self-made woman would never be penniless, due to her creativity, work ethic, sense of humor, and some luck. Yet you do remember that old, still true saying about luck meeting tons of preparation don’t you? So, while a lot of her money is gone, no one can steal Ms. Penney’s mind. I’m not Jewish, and I know and respect that.

Not that you asked for my advice, yet if you have not yet "made it" to the extent that Ms. Penney has, curb the urge and save the time it would take you to write jealous remarks, and reread the part where she outlines her working three jobs, etc.,. Only in America right? Refocus any veiled contempt and busy yourself writing the last chapters of your own success. Yes, you are on the road, and you CAN finish big, but never by quitting.

We are all richer for Alexandra Penney (and anyone) telling her truth, and for a country which allows us to do so, and finally for an internet to give us both the instant and far-reaching platform in which to share.

Let’s create and embody solutions. Let’s continue to offer a shoulder to anyone who is suffering, much like the inscription on the pedestal of our proud lady, the Statue of Liberty: "Give me your tired, your poor, your huddled masses yearning to breath free". Let’s not excoriate people who say they feel down-trodden, especially when they flat out exclaim they don’t want our pity.

Footnote: * There was no fundamental investment in the Madoff fund, into which thousands begged to be admitted. After all, word spread like wild fire about how great his "returns" were. (Many investors, once disgruntled at being "outside" nose-pressed-jealously -against-the glass entry door, are now breathing more than a sigh of relief!) Rather the Madoff Fund was all a fraudulent pyramid scheme by which new investor monies repaid earlier investors, a concept mastered earlier by Charles Ponzi.

While Madoff’s scheme has currently impoverished principally Jewish investors and foundations, Ponzi's scheme in the early 1900s preyed principally on Italians. In both cases, friends and friends-of friends gave their "hero" money yet their "returns" actually were "returns" of other people’s money, and not a distribution of profits from any bona fide investment. Both men’s "empires" crashed only when too many investors demanded their money back; i.e., the evaporation of new funds to repay existing investors’ liquidation requests exposed the fraud. Both men, incidentally, were frantically attempting to raise new money at the time of their arrests.

Ponzi averted discovery numerous times, elongating his reign of abuse and contemptible lawlessness for decades. We’ve yet to discover just how many times and for how long Bernard Madoff successfully tricked suspicion.