I see the tally is mounting up on what Mr Madoff has made off with. (Sorry, someone had to say it): here are the names we recognise: RBS £400m; Santander 2 bn euros; and Nicola Horlick got her fingers burned.
All these sound and respectable institutions and people; Madoff was well-respected, chair of Nasdaq, not some back-street shyster. This is like finding out that the Royal Apothecary failed his first MB and has a bogus certificate of qualification.
How can we tell what other hedge funds are Ponzi? Remember that Hyman Minsky classified derivatives into hedge, futures and Ponzi, so there may be many others to come. We have only two weeks to wait, because December 31st is accounting time for hedge funds, when more scams may come to light.
Again, the cry will go up: "They're not the Masters of the Universe, they're just a lot of very naughty boys" (and girls, Nicola, sorry). It is funny until we remember the impact on real people if their banks succumb.