The bezzle
Etymology
Coined by the economist John Kenneth Galbraith in his 1955 book The Great Crash, 1929, as a shortening of "embezzlement." Galbraith noted that in good times the bezzle grows, because prosperity dulls scrutiny, and in downturns it shrinks as audits and suspicion surface the fraud. The investor Charlie Munger later extended the idea with the "febezzle," or functional equivalent of the bezzle, for undiscovered losses that aren’t technically crimes.
noun · /thuh BEZ-ul/
The span of time when an embezzlement or fraud has occurred but nobody has noticed yet, so both the thief and the victim feel wealthy at once.
What it names
A strange psychological surplus that inflates during booms — the undiscovered losses on the books that let everyone feel richer than they are — and helps explain why bubbles feel so good right up until the reckoning.
Example
Every mania has its bezzle — a growing pile of paper gains and quiet frauds that only the crash finally forces into the daylight.
Related idea
A Ponzi scheme is a specific structure of fraud paying old investors with new money; the bezzle is the more general interval of undetected loss, whatever its cause, during which the illusion of wealth persists.