Is the Madoff scandal the (other) story of the year?

While all eyes were turned to the Big 3 bailout, another shocking, large-scale fraud case emerged in the finance world Thursday. As the WSJ reported: "Bernard L. Madoff, a former chairman of the Nasdaq Stock Market and a force in Wall Street trading for nearly 50 years, was arrested by federal agents Thursday, a day after his sons turned him in for running what they said their father called 'a giant Ponzi scheme.'"

 Paul Kedrosky finds the allegations "staggering," and provides the key excerpts from the SEC's complaint where Madoff confesses to "paying returns to certain investors out of the principle received from other, different investors." Said Madoff, according to the report: "It's all just one big lie."

 The anonymous fund manager/blogger Cassandra suspected for years that something was wrong with Madoff - it's a fascinating post: "Either he was crooked beyond belief or he was an evil contrapreneurial genius. Who would have thought he was both??!!"

Michael Panzner quotes fund manager Doug Kass, who believes this could be "the biggest story of the year... it is bigger than Enron, bigger than Boesky and bigger than Tyco. It attacks at the core of investor confidence -- because, if true, and this could happen... investors might think that almost anything imaginable could happen to the money they have entrusted to their fiduciaries."