Grounded! Well, sort of…

When I was a kid- “Grounded!” was the worst news. No movies, no bike riding, no going out to visit friends, nothing. It was the ultimate punishment. And it was usually for some dire offense such as a broken window, failure to heed a parent or the super bad offense of trying out colorful language recently heard in the living room.

As far as I can tell, I never lied to people for umpteen years and stole $50 billion dollars. Nope. Not me. Yet, the NY Times and Bloomberg this morning are reporting that Bernie Madoff who is the central figure in the $50B fraud, is receiving house arrest (“grounded”) as part of exceedingly generous bail terms pending further legal proceedings.  THAT is a good deal for him. He even gets to go out (with electronic monitoring) but has a 7 pm curfew. Man- I never had it that good when I broke the living room window. This guy is GOOD.

If I had stole $50B when I was a kid, I would still be grounded. I bet ‘ol Bernie is catching up on his soaps on his big screen TV in his multi-million dollar apartment. This could be the best thing to ever happen to him! Imagine how good he will get on his video games. He can twitter to his heart’s content, work out with his Wii and really be a Facebook bavog. He can catch bargain matinees of new movies before 7 pm and even hit the gym. He doesn’t have the headaches of falsifying multiple businesses on a daily basis– that has GOT to be a hard job. Enjoy Bernie! This is probably the most carefree time of your life. Fortunately, you stole have enough money to really enjoy yourself.

Funny thing I have noticed about the American legal system and white collar crime. We sure do seem to love it. In fact, we can barely bring ourselves to punish these guys. But, god help you if you are hispanic (or african american) and mug a white, wealthy member of the community for $250 bucks. You may never see the light of day again. If it is your 3rd offense in California, you are simply done.  But if you are an amazingly good fraud and cheat, you get home arrest and a curfew. Yet I have to wonder at the amount of damage that a guy that allegedly steals $50B causes verses an alleged mugger of $250.  I mean, how many people’s lives and businesses are crushed by a guy that steals this much?

I would like to posit a new theory of market efficiency. I shall call it the “Cynical Theory of Market Efficiency.” The premise is that the market is efficient inasmuch as it discounts all information and takes the most cynical direction from among the many future possibilities. If you run into Bernie some afternoon at Central Park, ask him what he thinks.

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