The economist John Kenneth Galbraith (1908-2006) coined the word “bezzle” from “embezzle” in his book, The Great Crash, 1929 (1954). The “bezzle” was defined as “an inventory of undiscovered embezzlement.”
 
American business magnate Charlie Munger coined “febezzle” (also “febezzler” and “febezzlement”) by at least 2000, when he explained:
 
“Deterred by the apparent smallness of economic effects from his insight, Galbraith did not ask the next logical question: Are there important functional equivalents of ‘bezzle’ that are large and not promptly self-destructive? My answer to this question is yes. I will next describe only one. I will join Galbraith in coining new words, first, ‘febezzle’, to stand for the functional equivalent of ‘bezzle’ and, second, ‘febezzlement’, to describe the process of creating ‘febezzle’, and third ‘febezzlers’ to describe persons engaged in ‘febezzlement’. Then I will identify an important source of ‘febezzle’ right in this room. You people, I think, have created a lot of ‘febezzle’ through your foolish investment management practices in dealing with your large holdings of common stock.”
 
“Febezzle” (finance + embezzle) has been used only infrequently. “Bull Market ‘Febezzlers’ Riding High — For Now” by Tony Isola was a widely published article on April 9, 2015.
 
   
Wikipedia: Charlie Munger
Charles Thomas Munger (born January 1, 1924) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Charlie Munger as “my partner.” Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, and a director of Costco Wholesale Corporation.
 
Google Books
The Great Crash
1929
By John Kenneth Galbraith
Boston, MA: Houghton Mifflin Company
1954
Pg. 138:
In many ways the effect of the crash on embezzlement was more significant than on suicide. To the economist embezzlement is the most interesting of crimes. Alone among the various forms of larceny it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country’s business and banks. This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions of dollars. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.
   
The Best of Charlie Munger: 1994-2011
A collection of speeches, essays, and Wesco annual meeting notes
Pg. 83:
11/10/00 TALK OF CHARLES T. MUNGER TO BREAKFAST
MEETING OF THE PHILANTHROPY ROUND TABLE
Pg. 84:
For another thing, the traditional thinking of economists often does not take into account implications from the idea of “bezzle”. Let me repeat: “bezzle”, B-E-Z-Z-L-E.
 
The word “bezzle” is a contraction of the word “embezzle”, and it was coined by Harvard Economics Professor John Kenneth Galbraith to stand for the increase in any period of undisclosed embezzlement. Galbraith coined the “bezzle” word because he saw that undisclosed embezzlement, per dollar, had a very powerful stimulating effect on spending. After all, the embezzler spends more because he has more income, and his employer spends as before because he doesn’t know any of his assets are gone.   
Pg. 85:
No doubt Galbraith saw the Keynesian-multiplier-type economic effects promised by increases in “bezzle”. But he stopped there. After all, “bezzle” could not grow very big, because discovery of massive theft was nearly inevitable and sure to have reverse effects in due course. Thus, increase in private “bezzle” could not drive economies up and up, and on and on, at least for a considerable time, like government spending.
 
Deterred by the apparent smallness of economic effects from his insight, Galbraith did not ask the next logical question: Are there important functional equivalents of “bezzle” that are large and not promptly self-destructive? My answer to this question is yes. I will next describe only one. I will join Galbraith in coining new words, first, “febezzle”, to stand for the functional equivalent of “bezzle” and, second, “febezzlement”, to describe the process of creating “febezzle”, and third “febezzlers” to describe persons engaged in “febezzlement”. Then I will identify an important source of “febezzle” right in this room. You people, I think, have created a lot of “febezzle” through your foolish investment management practices in dealing with your large holdings of common stock. 
Pg. 86:
Now toss in with “febezzlement” in investment management about $750 billion in floating, evergrowing, ever-renewing wealth from employee stock options and you get lot more commonstock-related “wealth effect”, driving consumption, with some of the “wealth effect” from employee stock options being, in substance, “febezzle” effect, facilitated by the corrupt accounting practice now required by law.   
Pg. 100:
“Academic Economics:
Strengths and Faults
After Considering Interdisciplinary Needs”
Herb Kay Undergraduate Lecture
University of California, Santa Barbara
Economics Department
By Charles T. Munger
October 3, 2003
Pg. 119:
8) Not Enough Attention to the Concept of Febezzlement
Okay, I’m now down to my eighth objection: Too little attention within economics to the simplest and most fundamental principle of algebra. Now this sounds outrageous, that economics doesn’t do algebra, right? Well, I want to try an example – I may be wrong on this. I’m old and I’m iconoclastic – but I throw it out anyway. I say that economics doesn’t pay enough attention to the concept of febezzlement. And that I derive from Galbraith’s idea. Galbraith’s idea was that, if you have an undisclosed embezzlement, it has a wonderful Keynesian stimulating effect on the economy because the guy who’s been embezzled thinks he is as rich as he always was and spends accordingly, and the guy that had stolen the money gets all this new purchasing power. I think that’s correct analysis on Galbraith’s part. The trouble with his notion is that he’s described a minor phenomenon. Because when the embezzlement is discovered, as it almost surely will be, the effect will quickly reverse. So the effect quickly cancels out.
 
But suppose you paid a lot of attention to algebra, which I guess Galbraith didn’t, and you think, “Well, the fundamental principle of algebra is, ‘If A is equal to B and B is equal to C, then A is equal to C.’” You’ve then got a fundamental principle that demands that you look for functional equivalents, all you can find. So suppose you ask the question, “Is there such a thing in economics as a febezzlement?” By the way, Galbraith invented the word “bezzle” to describe the amount of undisclosed embezzlement, so I invented the word “febezzlement”: the functional equivalent of embezzlement.
 
Financial Times
May 5, 2009 7:50 pm
A boom based on little more than a bezzle
By John Kay
The “bezzle” is one of John Kenneth Galbraith’s best inventions. There is an interval during which an embezzler benefits from stolen money but the victim does not know he has lost it. The bezzle is the amount by which the world is better off in the meantime. Bernard Madoff created the largest bezzle in history.
 
Charlie Munger, Warren Buffett’s long-term business partner, described the “febezzle”. Mr Munger doesn’t have the gift for language of Galbraith, and I doubt the febezzle – the functionally equivalent bezzle – will catch on. The febezzler benefits from legally appropriated money but the victim does not yet know that he will have to pay for it. In the last decade we have all been victims of febezzlement on a scale that consigns Mr Madoff to the little leagues.
 
Twitter
Value Investor
‏@ValueNiveshak
Warren Buffett is now ahead in his bet against d hedge funds! Whistle whistle… down with d febezzlers! http://bit.ly/14bp7C7  #nifty #sensex
10:54 PM - 24 Jan 2013
 
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Value Investor
‏@ValueNiveshak
@viveksharma72 Am no febezzler (advisor, broker, etc.)! More of a flâneur investor. But I do trade opportunistically on the long/short side!
8:12 AM - 27 Aug 2013
 
NerdWallet (reprinted on Nasdaq)
Bull Market ‘Febezzlers’ Riding High — For Now
by Advisor Voices on April 9, 2015
By Tony Isola
(...)
It doesn’t take a stretch of the imagination to predict that some ugly truths will be unveiled when this bull market eventually ends, too. And it’s a good bet that some of those ugly truths will involve “febezzlers.”
 
Charlie Munger, Warren Buffett’s right-hand man for the last half-century, coined the term febezzler, which he defined as a financial advisor who overcharges his clients and provides poor and sometimes illegal advice.