Poor Bernie Ebbers. His number's up. The man drove up to the Oakdale Correctional Complex in Louisiana yesterday. He got out of his Mercedes and joined the former governor of the state, Edwin Edwards, in the federal pen. Hizonner faces 10 years in the hoosegow for extorting money out of riverboat casinos. Ebbers got 25 for his role in a telecom scandal. Accountants working under his direction took some whole numbers out of the operational columns, they say, and slipped them into the capital budget.

Both men did naughty things, we don't deny it. But putting poor Bernie behind bars for a quarter of a century for some financial hanky-panky seems excessive. When it comes to numbers, after all...anyone can make a mistake. The things are downright slippery.

Just look at poor Brian Hunter. He would tell you. The man was making $75 to $100 million per year, as an ace energy trader. He was so good that even the savviest players in the industry wanted in on his game. Both Morgan Stanley and Goldman Sachs had invested money with Hunter's employer, Amaranth Advisors, the $9 billion hedge fund that blew up last week.

What went wrong? Hedge funds are supposed to be good at numbers, after all. They hire people with advanced degrees in mathematics simply to make sure they've calculated the odds correctly and offset their risks with their expectations in a logical manner.

"Somebody was not monitoring this correctly," said one pro, referring to the extraordinary bet that Hunter placed on gas prices, a bet so large that at one time, he held about 10% of the global market in natural gas futures.

As far as we can tell, these are the numbers in a nutshell: Hunter was long. And investors were short as much as $6 billion.

"It appears we have had a major malfunction," might have been another way to put it. But that famous understatement has already been taken. That was on January 28, 1986...with 50 million TV viewers watching. It was the day the spacecraft Challenger exploded into smithereens.

Nobel prize-winning physicist Richard Feynman described the NASA catastrophe as an institutional failure. The scientists and engineers at NASA, he charged, has been upstaged by bureaucrats who had been allowed to "pervert standards."

But in the financial world, standards are perverted so easily they must have a twisted gene to start with. [See the letter from a dear reader, below, about slipping standards during the Roman era credit collapse. "Rigor at the outset," says Tacitus, speaking broadly about financial affairs, "becoming negligence at the end."]

That's why we can't help but feel sorry for Brian Hunter. Like Ebbers, he came from nothing to make a fortune. He went to college in Alberta, where he was a star at mathematics, of course, specializing in financial models. But the poor 32-year-old had barely gotten used to being extraordinarily rich and extraordinarily talented, when a very ordinary little slip-up with numbers derailed his extraordinary career.

We are reminded of the now legendary Nick Leeson whose rags-to-riches rise also came apart over some mundane, barely noticed figures...figures of eight, in his case.

Leeson, the working class son of a plasterer, who failed his final math exam, made such an impression at Britain's prestigious Barings Bank that he was quickly promoted to the trading floor and then given a new operation in futures markets on the Singapore Monetary Exchange (SIMEX) where he began pulling in millions for Barings by gambling on the movement of the Japanese stock market (Nikkei Index). The whiz kid seemed to have it altogether. By the end of 1993, he had made more than Ã,£10m for Barings
- nearly 10 percent of its total profit that year.

What Barings didn't know was that Leeson, by now both Chief Trader and also in charge of settling accounts in the office (jobs that were usually done by different people), was hiding his mistakes in an account, numbered 88888, for which the company was liable. By December 1994, the numbers in 88888 had piled up...to over half a billion. A desperate Leeson then placed his most desperate bet - that the Nikkei would not fall below 19,000 points. It would have been a reasonable assumption under ordinary circumstances. But then came one of those fat tail events that give bell curves their shape - on January 17, 1995, a 7.2 earthquake hit Kobe in Japan and the Nikkei crashed by 7% in a week.

Leeson's gambling spiraled out of control as he piled on more and more debt hoping to push the index back the other way. Most of the $1.3 billion he eventually lost for Barings came from trying to cover up what had happened.

On the verge of turning 28, the whiz kid could take it no more. Leaving a scribbled apology, he fled with his wife to Borneo and then to Frankfurt, where he was caught.

The numbers then looked pretty bad: The futures market was in shock, a 233 year-old bank to the Queen was bust; more than a thousand bank employees were out of jobs; and investors were wiped out.

And all for a string of single digits. Ordinary insignificant set of numerals - 88888.

*** "Time to read up on the Panic of 1837," says our Pittsburgh man, Byron King. "One of the more cogent observers of the time was Ralph Waldo Emerson, who was trying to uphold the old standards and protest against the easy morality of the new age.

"'This invasion of Nature by Trade with its Money, its Credit, its Steam, its Railroads,' he complained, "threatens to upset the balance of man, and establish a new universal monarchy more tyrannical than Babylon or Rome.'

"Interesting that Emerson comments on 'Railroads.' His pal Henry Throreau once said, 'Men do not ride on railroads. The railroads ride on us.'

"Emerson actually welcomed the Panic of 1837, as a wholesome lesson to the new monarchs of manufacturing: 'I see good in such emphatic and universal calamity...'

"He saw the Panic of 1837 as the taking-down of the juggernauts of finance, the destruction of the moneychangers in the Temple, vengeance against those who traded nothing for something, and who sucked off of the honest toil of the working people of the world. Emerson was a champion of old fashioned hard work, the mechanical arts, of raw creation, of molding useful things from the soil and rock of the earth...

"'The American workman who strikes ten blows with his hammer, whilst the foreign workman only strikes one, is as really vanquishing that foreigner, as if the blows were aimed at and told on his person.

"'I look on that man as happy, who, when there is question of success, looks into his work for a reply, not into the market, not into opinion, not into patronage. In every variety of human employment, in the mechanical and in the fine arts, in navigation, in farming, in legislating, there are among the numbers who do their task perfunctorily, as we say, or just to pass, and as badly as they dare, - there are the working men, on whom the burden of the business falls, - those who love work, and love to see it rightly done, who finish their task for its own sake; and the state and the world is happy, that has the most of such finishers. The world will always do justice at last to such finishers: it cannot otherwise.

"'He who has acquired the ability, may wait securely the occasion of making it felt and appreciated, and know that it will not loiter. Men talk as if victory were something fortunate. Work is victory. Wherever work is done, victory is obtained.'"

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.