There are plenty of quality hedge funds run by honest people. They tend to try to stick to people they know, who are also honest. Madoff has been a crook his whole life. Now that he is at the end of his days, he gets charged, put on trial and may possibly get 5 years and 5 million fine? That's a joke. Let alone considering the fact that he is going to jump bail anyway.
Do not be happy for investors who withdrew money. Lawyers will show that such money was handed out in much higher percentage than the actual monies available at the time of the distribution given the actual assets in the fund. I have received distribution checks of this type - 7 years after a fraud became known, and am still waiting for the final check that the receiver will distribute 9 after the fraud came became known. This previous fraudulent fund had only 50 million, and the guy gave complete cooperation. My guess is that the courtroom door will close for the last time on the Madoff fraud, 18 to 20 years from now.
I'll give you some more stuff to entertain you. Offshore funds will be unlocked, exposing the best and brightest. Those crying the liberal mantra the loudest are tax cheats, rationalizing their 'decision as not paying for Bush' war. UBS, CS, Julius Baer, Lichtenstein, Costa Rico, and my fave, Curacao, and the Duess empire. The Sith Lord will be exposed as a consortium of MidEastern and Eastern European manipulators with an intense hatred of America. An old name will resurface as a prime participant in this most horrible of frauds. They will sweat these guys, and they will cry that it all go out of hand. reporters in bed w/Hedgefunds. Naked shorts are just the tool; the setup is, rumors, inuendo, blackmail, and negative newsflow. Many hedgefunds exposed as simply shell games, where the returns are fabricated, either by the Ponzi method, but more likely naked shorting, insider trading, payoffs, etc. Major arrests of household names in finance and regulation. Politicians? Possilble. Not sure if they have the guts. Exodus of most all retail investors from the markets. major pension funds denying payments and retirements to people who earned that right. And finally, this government crap fails, and you are I are sittin' under the overpass grilling a hotdog over a garbage pail fire. I don't like this. Not one bit. But I learned something from my dogs. I don't shit where I eat.
if this is by any means true, why is the market not collapsing? it is a bloomberg report after all. madoff has been subject to rumors of being fake for a decade. http://www.bloomberg.com/apps/news?pid=20601110&sid=alHD.ggaCDj0 and on reuters http://www.reuters.com/article/governmentFilingsNews/idUSN1227776020081212 it does not sound like fake news. but if it is THIS madoff, then we are talking about a major, major collapse due to fraud. this can easily cost the major indices another 15%. but the SP seems to ignore it. weird.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYXIoxUpmaU8&refer=home no long positions in stocks over that weekend. that is for sure.