Kass: Madoff Was Made Up

Madoff & Co. was also an important presence in market making, raising the specter of counterparty risks. I suspect that the exposure here is minimal as it appears that the market making and investment management businesses operated separately as independent entities. Also, there have been no complaints about settlement problems with Madoff that I am aware of today. I presume that a large brokerage firm will gobble up Madoff's market making business by the end of the weekend.

It's a major blow in a market that is already fragile and in which confidence has been materially shattered.

With so many red flags raised, the Madoff fraud is another example of a derelict SEC. What is even more astonishing is that Madoff runs a broker/dealer through which the accounts are actively managed. Indeed, the MAR/Hedge column from seven and half years ago raised a number of obvious questions regarding the steadiness of Madoff's returns.

And, in the end, it appears that Madoff was made up!

Doug Kass writes daily for RealMoney Silver, a premium bundle service from TheStreet.com. For a free trial to RealMoney Silver and exclusive access to Mr. Kass' daily trading diary, please click here.

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How does an alleged multibillion-dollar 'Ponzi scheme' by market maker and money manager Bernie Madoff affect your confidence in the stock market?
	Has no effect. Makes me more nervous than I already was. Not as bad as past scandals I've seen. I've never trusted Wall Street, and I never will.