The timing of Madoff's undoing could not be worse, but not surprising. Madoff's classic ponzi scheme depended on continued new investments. With the markets in turmoil, those new investors must have been impossible to bring into his venture. Today marks continued trouble for the stock market and manufacturing shows an even worsening economy. Even Apple has been downgraded to "neutral" by Goldman Sachs Group Inc. from a previous "buy" status. Add to all of this the lack of resolution concerning the prospects for the U.S. auto manufacturers.
Madoff's scheme is set to further erode investor confidence. Although we might call for increased investor due diligence, many thought that Madoff was a safe player. Many large banking institutions from around the world have announced billions in losses on the Madoff scheme already. What's to come? For starters, I suspect we will see more calls for Congressional hearings and even more calls for greater regulation of the investment community.