Since the story broke a few days ago, I've been extremely interested in the arrest of Bernard Madoff, former Nasdaq chief, whose investment business has been revealed as a massive scam with loses of as much as $50 billion. Since I'm in the news business a lurid story with gargantuan bad acts and fabulously wealthy people claiming they're on the way to the poor house is irresistible at some level. But that's not the root of my interest.

What we're hearing is that this was a classic, if vast, Ponzi scheme. So in the annals of the great financial sector collapse of 2008, unlike the various Wall Street firms and high flyers who were ruined because of the Real Estate Bubble, illiquid mortgage-backed derivatives and generalized speculative euphoria, Madoff's operation was just a scam, an old-fashioned fraud, that a lot of big players got suckered into.

But put me down as suspicious -- suspicious that the difference between Madoff's and the other investment implosions we've seen over recent months will turn out to be so clearly one of kind rather than degree.

Did Madoff start his operation as a consciously fraudulent enterprise? Or was he another operator who was massively over-leveraged, made a bunch of bad calls (you don't have to make many if your leverage is high enough), lost virtually everything but then was able to keep operating and taking in money and claiming high returns because he had such insanely tight control over his books? In other words, did he start legit, get into trouble and then evolve, for lack of a better word, into a Ponzi scheme?

To be crystal clear, I'm not claiming any specific knowledge of the Madoff case that's not in all news accounts. This is more of a hunch, based on what I can put together about his career. But it's also because a lot of the firms on Wall Street were so massively leveraged, probably a good deal more than they're letting on even now, and had so much obvious crap on their books that they were claiming had real value, that Ponzi Scheme would probably be a decent description of what they were up to as well.