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Right now, the victims of Madoff's alleged crime are in a very strange place. They still have their big homes. At least for now, the furniture is still polished, the Lexuses are quietly garaged, and the people still stand — except for poor M. Villehuchet, who last week in New York slit his wrists. But underneath these material reminders of a former life there is nothing — or very little.

The financial piers supporting lifetimes of accumulated wealth have simply vanished. This week, people everywhere are preparing to celebrate the New Year, while Madoff's victims are looking over their bank statements and credit card bills, asking themselves one question: How long can we hang on? (See the 10 worst business deals of 2008.)

As one of the taken, I get calls daily from those who have lost their financial lifeline due to this mess. This wasn't a slow-fade-to-ruin crime, but a flip-the-switch-to-poverty crime, and many are now in an adrenal-driven shock stage of having no money — at all — in the bank. The ruin is especially tragic among retirees hit by this pre-holiday bomb.

But the stories of Madoff's victims also signal a new resetting of personal expectations, a dramatic and inspirational recasting of the American Dream. "Right now, the people going through this tragedy are in the process of reordering their lives, re-evaluating their place on earth, and trying to find a larger meaning," says a New Paltz, N.Y., psychologist indirectly hit by Madoff. Let's call him Dr. K. His parents, who live in Boca Raton, Fla., had their retirement millions wiped out. "My parents are now grateful for the things they do have," he says. (See the top 10 scandals of 2008.)

Dr. K flew down to Florida last week to help his parents sort out their new reality. "My mother is the practical one, she says, 'If we have to live this way now, we will. Those who will make it through this are those that don't identify themselves with their bank accounts, they will transcend this. Those whose egos and self are wrapped up in their assets will be lost.' "

There's anger too, and a gathering phalanx of lawyers ready to go after Madoff, his feeder funds and brokerage houses. Few victims expect to realize much from this legal offensive. Most see the Internal Revenue Service as the go-to place for lost monies, with at least three years of back taxes being recoverable. The next best hope: the Securities Investors Protection Corporation, which was set up for just such fraudulent behavior among securities brokers. It's unclear how much money SIPC has for victims, and payouts are notoriously slow. But there are reports it may offer between $100,000 to $500,000 per victim, provided one can prove they were part of Madoff's madness — no small task for those who lost money through feeder funds. SIPC's website says Madoff recovery forms will be available before January 9, 2009. (See pictures of the top 10 scared traders.)

Then there are those keeping silent. These are the ones who recently took out large sums from their Madoff accounts. They're lying low for fear government investigators or lawyers will come after whatever money or homes they have left.

We are all connected whether we like it or not, and our collective energies can change things for the better, while our collective indifference can kill us. Nobel Prize–winning author and Holocaust survivor Elie Wiesel knows this all too well. What must Wiesel be thinking right now? His Foundation for Humanity destroyed by a big-shot Jewish financier? Impossible. But the foundation had $15.2 million under management with Bernard Madoff Investment Securities. This represented substantially all of the foundation's assets. And the double hit for charities like Wiesel's is that there will be no tax recovery available.

Yet out of this ruin, Wiesel's foundation, in a statement of grace, found something inspiring: "The values we stand for are more needed than ever ... We shall not be deterred from our mission to combat indifference, intolerance and injustice around the world." They've been hit, but they are not down. Life and work go on.

For Larry Leif, 58, a successful sporting goods and toy company entrepreneur in Delray Beach, Fla., his retirement is more than on hold, it's completely disconnected. Leif, who has been planning his golden years since the age of 19, lost his entire $8 million retirement account with Madoff. Now it's nothing more than a series of phony statements he thumbs through while shaking his head.

"All we have is each other now," says Leif. "This is a story of a system that failed us. The Securities and Exchange Commission needs to be abolished, and a new system of regulation needs to replace it. There is a bigger story here, the downfall of our government. Where were the checks and balances? We can't continue this system. We have the power to collectively change this, and we will. I was born for this battle."

"I'm blessed," he adds. "I'm healthy, I have great friends, and I have a new focus in my life, one I didn't expect three weeks ago. We can make this system better for everyone. This is now my mission."

This is one dividend that Madoff could not steal.

See pictures of the stock market crash of 1929.

See pictures of the recession of 1958.

• Robert Chew
• As Madoff's victims face devastating losses, some succumb but others grow stronger.