Stephen Harbeck, the president of the Securities Investor Protection Corporation, made a smart and kind of obvious point to the AP today, which is that the $50 billion figure associated with Bernie Madoff’s scheme is totally random and probably not actually accurate. “I think it’s somewhat misleading to say this was a $50 billion scheme because I believe that includes the fictitious profits,” he said. “If that is the case, and I believe it to be the case, then the real dollars lost would be considerably lower.” Also, it was Bernie Madoff who came up with the figure in the first place, and do we really trust him?
Don’t get too excited, though. Just because the amount of real money involved may be smaller doesn’t mean the amount that people lost is smaller: Madoff’s investors thought they had accrued larger and larger fortunes over time; that money felt real to them. The only thing that would make this whole thing better is if Bernie all of a sudden came out with, “I was kidding about the whole thing! I have everyone’s money right in this safe. Surprise! you’ve been Punk’d!” Actually, we’re not sure that would be better. That would just be really, really weird.