Category Archives: Ridiculously obvious scams

Taibbi on How Wall Street is Looting Public Pension Funds

You must go, pronto, and read Matt Taibbi’s latest expose, on how hedge funds are plundering public pension funds, meaning pension funds managed on behalf of government employees like policemen, sanitation workers, and teachers. Taibbi describes how a concerted PR campaign has made workers the scapegoats for large pension shortfalls when in fact public officials and unscrupulous financiers (both through their machinations with these funds and via damage done by the global financial crisis) are the real perps.

Why You Should Not Trust the Financials of Private Equity Owned Companies

Yesterday, we discussed how a family private equity firm Swift River, which is owned in part by Tony James, Blackstone’s head of private equity business, purchased a software company called iLevel Solutions rom Blackstone itself.

Today, we are going to examine iLevel in greater detail. We will see that this company is built from the ground up as vehicle to convince PE investors and the SEC that Blackstone and other PE firms have implemented robust financial controls over the companies they own. The reality, however, is the opposite

How Private Equity Executives Like Blackstone’s Tony James Engage in Dubious Side Deals

Today, we’ll examine conflicts of interest involving principals at the private equity firms themselves. Here our object lesson is private equity kingpin Blackstone Group.

Senator Diane Feinstein’s Husband Selling Post Offices to Cronies on the Cheap

To quote famed short seller David Einhorn: “No matter how bad you think it is, it’s worse.” On the “corruption among what passes for our elites” front, this story about self-dealing in the privatization of the Postal Service gives an indication of how bad things really are.

Cathy O’Neil: Short Your Kids, Go Long Your Neighbor: Betting on People Is Coming Soon

Yet another aspect of Gary Shteyngart’s dystopian fiction novel Super Sad True Love Story is coming true for reals this week.

Besides anticipating Occupy Wall Street, as well as Bloomberg’s sweep of Zuccotti Park (although getting it wrong on how utterly successful such sweeping would be), Shteyngart proposed the idea of instant, real-time and broadcast credit ratings.

Cathy O’Neil: College Ranking Models

Last week Obama began to make threats regarding a new college ranking system and its connection to federal funding. Here’s an excerpt of what he was talking about, from this WSJ article:

The president called for rating colleges before the 2015 school year on measures such as affordability and graduation rates—”metrics like how much debt does the average student leave with, how easy is it to pay off, how many students graduate on time, how well do those graduates do in the workforce,” Mr. Obama told a crowd at the University at Buffalo, the first stop on a two-day bus tour.

David Dayen: Click-Bait Law Enforcement as Schneiderman Ignores Systemic Wall Street Fraud, Sues Trump University

The pitch-perfect parody of the year goes to The Onion for their editorial from CNN.com’s managing editor (whose actual name was used in the story), “Let Me Explain Why Miley Cyrus’ VMA Performance Was Our Top Story This Morning.”

It goes on from there, basically defining the phenomenon of click-bait, where websites run deliberately titillating stories with little or no redeeming value in a desperate stab for attention.

I think yesterday counts as the first-ever clickbait lawsuit, filed by New York Attorney General Eric Schneiderman.

CFPB Examiners Find Mortgage Servicing Business Remains a Sewer

Not that we needed additional evidence, but the Consumer Financial Protection Bureau has found more fraud and theft inside the nation’s mortgage servicing operations. CFPB has examiners in both bank and non-bank servicers; this is the first time non-bank servicers have faced such scrutiny. And their new report on Supervisory Highlights for the summer shows that extremely little has changed, despite a gauntlet of settlements that were supposed to end this conduct (OK, not really).

Quelle Surprise! Administration Lied About Mortgage Fraud Results, Numbers 4 to 10 Times Too High

Normally I’d relegate a good job of news spadework to the daily Links feature, but Bloomberg caught out Attorney General Eric Holder in such an egregious lie that this failed con job merits ample, widespread publicity and well-deserved derision.

Beware Private Equity Guys Bearing Gifts: Eminent Domain Mortgage Scam Hit with Well-Deserved Lawsuit

The private equity firm Mortgage Resolution Partners looks to be well on its way to getting the good uses of eminent domain torpedoed by getting some not-too-swift municipalities to sign up for its self-serving scheme. One indicator of how dubious the MPR program is that investors who have been complacent in the face of all sorts of abuses by originators and servicers, have roused themselves to act in a unified manner and push back against the MRP plan, in the form of a suit filed in Federal court in California on Wednesday.

How Police All Over the US Grab Cash, Cars, Even Homes from the Innocent

Just as government corruption and private sector looting have exploded in the last thirty years, so too have police shakedowns. Iin some places, such as a stretch of road in East Texas, civil forfeiture is a mechanism for local cops to separate people with out of state or rental license plates from their jewelry and cash. In other places, cars and even homes are the objects of the official seizures.

Chicago CEO Club, With Rahm and Pritzkers on Board, Pushed for Chicago Bond Downgrade, Whacking Local Investors and Pension-Holders

Even more so than most cities, Chicago has had the best government money can buy. In this case, the money is willing to engage in a scorched-earth policy of crushing local investors and wrecking the city budget to achieve its end of taming unions and making Chicago even easier pickings for looting via infrastructure sales.

Memo to Eliot Spitzer: Private Equity Firms are Scamming New York City

Eliot Spitzer, now the top contender to be the next New York City Comptroller, has said he wants to use the office to pursue financial reform. He has a ready, obvious, and comparatively easy target: the private equity industry.

Michael Hudson Shreds Obama’s Orwellian Speech on Middle Class Prosperity

Michael Hudson was so incensed by what he called a “Blairesque” speech by Obama on Wednesday that he took it upon himself to comment on its all-too-frequent sleights of hand and outright fabrications