from Karl Denninger at The Market Ticker
...Here's what John Galbraith said about it:
"In many ways the effect of the crash on embezzlement was more significant than on suicide. 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 business and banks. This inventory - it should be called the bezzle. It also varies in size with the business cycle."
That sounds rather arcane, but if you roll it around in your head for a while, it should make sense.
Here are some examples of "The Bezzle":
Liar loans: The borrower can't possibly pay off the loan on the original agreed terms and the institution that makes the loan "passes it" to an investor fully aware that the borrower almost certainly lied about credit capacity. Overly-rosy projections about growth in property values: The speaker is either incompetent (doesn't understand exponents - a fundamental mathematical concept) or is intentionally deceiving people. Overly-rosy projections about the stock market: "The market always comes back" and "over long periods of time it outperforms other investments." Both true, but both misleading; if you're 18 you might be able to wait for it to come back, but the market has remained flat to down from a given level for more than 20 years before. How long did you say it was before you intended to retire? "The Internet is doubling every three months!": It was - for about six months. But that got embedded into the business plans of thousands of businesses, long after the growth rate had started to slow down to something more sustainable. Oh by the way, the fundamental lie of that claim is that in 7 years the Internet would have gone from its original two people to covering morethan the entire population of the planet, including the rice farmer in China and the starving child in Bangladesh.
In short The Bezzle is "the lie" that is always present in business...