The victims of the Bernie Madoff scandal continue to mount and include some of the world's biggest financial institutions, major fund of funds managers, well-heeled individuals and many charities....
But many people's entire net worth has been wiped out by the scam, as well as any number of philanthropic organizations. Furthermore, pressure on the fund of funds who invested with Madoff; that, in turn, is going to add to the already intense pressure on their hedge fund clients. Even if that only damages investor sentiment, it could very much affect portfolios of people who never heard of Bernie Madoff prior to last week.
Now the funds that invested in Madoff's fund will likely have to liquidate. We are probably staring at hundreds of billions in issue. Maybe more? Some funds will prevent clients form liqudating so they may have to liquidate someplace else to raise cash. When they liquidate someplace else, others will likely want to or have to liquidate. As more and more liquidate, we will have liquidating liquidations.
The best solution to liquidating liquidations? Drink lots of lucious liquids. A Bloody and a Manhatten may work just fine for current times.