What was the straw that broke the camel’s back? Housing hedges or oil speculators?
For Madoff, none of the above, they didn’t “play” these markets. It was redemptions, pure and simple. Ponzi / pyramid schemes cannot go on when redemptions start to exceed contributions. Large investors (funds) in Madoff, particularly European, faced with potential of “run on the bank” withdrawals from their customers, needed the cash to shore up their own liquidity and asked for some of their money.