Ramifications of Bernard Madoff Blowout

Consider a wire excerpt:

Now, the collateral damage is likely to add to the chaos that has already been ravaging hedge funds. Spooked by losses and forced to raise cash quickly as the financial crisis ballooned, investors have sought to pull out their money from hedge funds, causing serious pain, and even some forced closures. A growing list of large, well-known firms have sought to block redemption requests in an effort to stem a mass exodus of investors who now desperately want to get into cash. In a letter sent Friday, the Citadel Investment Group said it was halting redemptions at its two largest hedge funds through March 31. Confidence will only weaken further with the Madoff firm scandal, intensifying pain for the industry. “If you couple this with the deleveraging already, this means one thing: more redemptions,” said Campbell R. Harvey, a professor at the Fuqua School of Business at Duke University.

So is this a bullish sign for U.S. stocks? Heavy sarcasm.

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