Dec. 16th Update: The 10 yr t-bill is at it’s All Time Low right now.  Here’s a CNBC Article on Warren Buffet and how many thought he conspired to build a Ponzi scheme early in his career.  

Original Article:

The world is focused on the fate of the Big/Detroit 3, Congress and the President are locked in a game of chicken with automaker’s management and the UAW but today’s EVEN bigger news was practically ignored, except in the bond markets.

Bernard Madoff’s $50 Billion dollar disaster is an epic deception by one of the real pillars of Wall Street.We are talking about a fraud the size of Enron and it’s barely being reported.

His Ponzi scam was even strongly questioned by Barron’s seven years ago (full Barrons article here on Madoff ), but somehow, the SEC never seemed to find it, even after such a glaring expose’.Just a classic example of “If it walks like a duck, and talks like a duck, it’s a duck”.

Ultimately, the damage here is trust. (Updated 12/18 read to the bottom, this is Serious).  Damage to Trust in Wall Street, trust in finance in general, trust in instutions, and in pledging capital anonymously around the world to where it is needed the most, the central idea of the efficiency of markets in the capitalist system.

Without Trust, Confidence lags, and without confidence, there’s not much reason or incentive to take economic action.These are serious times and serious problems, and though it might sound simplistic, it is not.The erosion of Trust and Confidence in private enterprise is the most serious fight we have had in our lifetimes, and probably will ever see in our lifetimes.

Saturday update: Mr. Madoff’s disaster has blunted the news of Yet Another Financial Fraud perpetuated by a high powered New York attorney named Marc Dreier who, according to the reports, held false meetings at clients’ offices for the purpose of selling fake promissory notes.  How has the face of evil become so banal?