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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