Recent Blog Posts
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The $4.5 Billion Dollar Bank Run
Nov 07 201111:20 am EDT -
The Times' Rorshach Geithner Story
Apr 27 20099:26 am EDT -
Sinking Animal Spirits
Apr 27 20098:45 am EDT -
Counter-cyclical Urban Policy
Apr 26 200910:00 am EDT -
Be Your Own Counterfeiter
Apr 26 20099:36 am EDT -
Being Tim Geithner
Apr 25 200912:37 pm EDT -
Notes From a Press Conference Naif
Apr 25 20099:41 am EDT -
What Good is the News?
Apr 25 20098:32 am EDT -
Stressful Enough
Apr 24 20092:29 pm EDT -
Not Regretting the Pound
Apr 24 20091:09 pm EDT
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The Madoff Game
The Excel-based BreakingViews Bernie Madoff game, which I could never get to work, has now showed up online, which allows me my own guess at how Madoff got to $50 billion.
Hugo Dixon assumed an initial investment of $1 billion 20 years ago; I brought that down to $100 million 37 years ago, roughly when Carl Shapiro sold his apparel company. I also assumed that Madoff siphoned off or lost only 6% a year, rather than 10% a year -- but I still managed to get to a total of $50 billion.
What's more, my total for "amount siphoned off or lost" is $17 billion -- which is the amount of money which Madoff claimed, falsely, to have under management, and which has now disappeared.
Of course, this model assumes that Madoff was a crook from the get-go; Justin Fox, for one, thinks he turned crooked only relatively recently. Still, it is quite fun -- especially when the online spreadsheet starts changing its numbers on you for no obvious reason!
(Via Kedrosky)
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