The 'bezzle' is back.

[randomness]

This post has been sitting in queue for a bit but things got busy. I'm just fond of the word "bezzle".

From http://www.nytimes.com/2008/12/15/business/15views.html:

Return of the ‘Bezzle’

First come the losses and the stupidities committed by bankers working for their own self-interest. Then come the rogue traders, unable to ’fess up on market bets gone wrong. The last to arrive is the bezzle.

That was John Kenneth Galbraith’s word for the outright frauds — the “inventory of undiscovered embezzlement” — that are built up when markets are good. These can be kept hidden for as long as the lies hold up.

The perpetrators are in no hurry to be uncovered, as they face public wrath, not to mention the possibility of many years behind bars. But truth will out.

For students of Galbraith’s seminal account of the 1929 stock market, “The Great Crash,” Mr. Madoff’s suspected fraudulent accomplishments shouldn’t come as a great surprise. In the Galbraith model of a speculative cycle, good times spawn the excess and corruption that eventually bring them to an end. The last good times were especially profitable, fertilizing the ground for especially large frauds.

If history is any guide — and if the late economist’s theory is to be believed — the first frauds to be discovered are not the largest. Mr. Madoff’s losses could be just a foretaste of what will eventually be exposed.

Bernard Madoff has been getting all the coverage, but Marc Dreier pulled a pretty blatant scam recently too.

Comments

And a Cheery Top O' The Mornin' Ta You Too! :)

[ddreslough.livejournal.com]

Oy... "If history is any guide — and if the late economist’s theory is to be believed — the first frauds to be discovered are not the largest."

I'm glad I live close to where the food is made. That's all I can say.

[hammercock.livejournal.com]

It's hard for me to even imagine more and worse Madoff-type frauds coming down the line. I might just stop trying. This shit makes my head spin.

[drwex]

Yeah, Drier's a real pip but he's going to cost people probably an order of magnitude less than Madoff.

I love the bit about being held just to make sure he wasn't a gang member.

[rosminah.livejournal.com]

Fo' bezzle.
Time to go work on my vegetable garden.

[marginaleye.livejournal.com]

Isn't this whole thing economic crisis built on, and out of, fraud?

Liars ripping off banks with bogus income statements.

Banks ripping off ignorant doofuses with tricky sub-prime mortgages.

Banks packaging big bundles of toilet-paper mortgages to investors.

Investors creating a market for bundles of toilet-paper mortgages, and thus an incentive to wink at the bogus income statements, and to keep ripping off the ignorant doofuses.

"You're very clever, young man, but you can't fool me... It's turtles Ponzi schemes all the way down!"

[outlawradio.livejournal.com]

Well at least I'm getting interesting work out of it!