Friday, 23 January 2009

The Bezzle

Not the angle of the edges of a stone - that's bevel - but this:

“To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months, or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there exists an inventory of undiscovered embezzlement in — or more precisely not in — the country's businesses and banks. This inventory — it should perhaps be called the bezzle — amounts at any moment to many millions of dollars. It also varies in size with the business cycle ...

... Just as the boom accelerated the rate of growth, so the crash enormously advanced the rate of discovery. ... Audits were ordered. Strained or preoccupied behaviour was noticed. Most important the collapse in stock values made irredeemable the position of the employee who had embezzled to play the market. He now confessed.”
John Kenneth Galbraith — the Great Crash 1929

Or, looking at it from another angle, a financial crisis makes a lot of people look very silly.

From the desk of B. Ramalinga Raju - Glad I'm not the auditors.
Santander Praised ‘Impeccable’ Madoff.

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