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US Financial Quagmire Bringing Out the Scammers
Posted by
timothy
on Thu Oct 09, 2008 08:22 PM
from the brother-where-is-your-empathy? dept.
from the brother-where-is-your-empathy? dept.
coondoggie contributes this snippet from NetworkWorld: "You could probably see this one coming. With all of the confusion and money involved you knew there would be cyber-vultures out there looking to cash in. Well the Federal Trade Commission today issued a warning that indeed such increased phishing activities are taking place. Specifically the FTC said it was urging user caution regarding e-mails that look as if they come from a financial institution that recently acquired a consumer's bank, savings and loan, or mortgage. In many case such emails are only looking to obtain personal information — account numbers, passwords, Social Security numbers — to run up bills or commit other crimes in a consumer's name, the FTC stated."
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well ... (Score:5, Funny)
Re:well ... (Score:4, Funny)
There you are!
Hey guys, he does exist! You betcha!
Parent
Re: (Score:3, Informative)
That's a list, not a run-on.
Re:well ... (Score:5, Funny)
I've heard Americans are so broke they are now scamming Nigerians
Did you see the latest?
SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP
DEAR AMERICAN:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am ministry of the treasury of the republic of america. my country has had crisis that has caused the need for large transfer of funds of 800 billion dollars us. if you would assist me in this transfer, it would be most profitable to you.
I am working with mr. phil gram, lobbyist for ubs, who will be my replacement as ministry of the treasury in january. as a senator, you may know him as the leader of the american banking deregulation movement in the 1990s. this transactin is 100% safe.
This is a matter of great urgency. we need a blank check. we need the funds as quickly as possible. we cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. my family lawyer advised me that i should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, ira and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov
so that we may transfer your commission for this transaction. after i receive that information, i will respond with detailed information about safeguards that will be used to protect the funds.
Yours faithfully minister of treasury paulson
Parent
Re:well ... (Score:5, Funny)
Parent
Re:well ... (Score:4, Interesting)
Dude, I ain't even from Iceland...
Parent
*illegal* scammers (Score:5, Insightful)
Re: (Score:3, Insightful)
Re: (Score:2, Interesting)
To solve this mystery, we need to look at who ended up losing money out of the fiasco, and who ended up making money. For example, a lot of people who bought houses have now lost everything. Many people's retirement savings are way down. And a lot of those banking and finance types are still getting millions of dollars in bo
Re:*illegal* scammers (Score:5, Insightful)
Don't forget that it wasn't just the mortgage brokers, but the government requiring banks to loan to people who normally wouldn't qualify for a loan and couldn't afford to pay it back.
Trotting this out are you?
Its true the government did require to make loans to people who wouldn't otherwise qualify, but that's not really the issue at all. They were forced to assume some extra risk by legislation, any remotely thoughtful person would realize that the banks should have MITIGATED this EXTRA risk, by covering it elsewhere.
To give you an example, if I run a bank, and the government says, you have to lend money to joe, and I know Joe can't afford it, and will probably foreclose, I don't just "do it and blame the government when joe forecloses", I set the interest rate on ALL my customers a little higher to ensure that when Joe forecloses I'm not bankrupt.
Thus the government requiring the banks to lend to people who they would otherwise not to, is no different than any other regulation placed on banks, all of which costs them money to satisfy, and in each case they simply pass the cost onto their customers.
Instead, in this case, they just blindly did it, and worse, they then created mortgage backed securities full of these risky loans and then did the most colossally stupid thing... the thing that caused the REAL collapse of the economy... they LIED about how risky these were, leading them to be GROSSLY overvalued.
Parent
Re:*illegal* scammers (Score:5, Insightful)
I don't think the government should have forced banks to make loans they were pretty sure would fail. Part of that is my belief in limited government; part of that is that it contributed to the housing bubble and all bubbles have to burst.
Fannie Mae and Freddie Mac should never have bought those bad mortgages in droves like they did. Having a flippant attitude of we'll buy up the mortgages and if they fail, well, we'll just get more money from the government was utterly and completely irresponsible.
The banks shouldn't have lied about the risk of the mortgage backed securities. I can't fault them too much for selling off the bad mortgages to Fannie and Freddie. They are a business and their job is to maximize profits. Having the person who made the loan having no interest in if the loan failed or not was stupid for the economy, but that's more or Freddie and Fannie buying the bad mortgages. But you're right, the banks do deserve some of the blame for lying about the securities.
Finally, having bought a house about 10 months ago, I know first hand that there is a lot of paperwork to go through. My wife and I knew what kind of loan we wanted and had done our homework to know what we could afford before we started looking at houses. While it's not popular in an election year to blame the constituency, personal responsibility comes into play. Yes, the people who signed for loans they couldn't afford bear some of the blame as well.
My point is that people are looking for the one "bad guy" to blame. Pointing fingers at one part of the problem while ignoring the rest won't get us out of this mess.
Parent
Re:*illegal* scammers (Score:4, Insightful)
Stupid ? It's a bloody genius thing. They crashed the economy, made sure that their own assets are safe - as they are with government bailouts - and will undoubtedly use those assets to buy lots of stock once the ongoing crash brings the rates low enough. Everything gets blamed on the government - the libertarians and other armchair economists will take care of that - while the masterminds laugh all the way to the bank, which they also own.
Parent
Re: (Score:3, Funny)
Let's make a deal Monte. I won't blame the banks when they actually eat the losses they incurred. So far they haven't. The executives of AIG (not a bank I know but still part of the Golden Parachute Club (TM)) for example went on a spa trip to the tune of half a million dollars right after getting their corporate welfare check
Re: (Score:3)
Re:*illegal* scammers (Score:5, Informative)
Parent
Re: (Score:3)
The one that contains the phrase "in a manner consistent with safe and sound operations"? That means they need to have a vault and a stereo, presumably?
Seems some people think that if they repeat the mantra - that government made the banks lend to bums - often enough everyone will believe it.
Re:*illegal* scammers (Score:5, Insightful)
The end of that same article also provides evidence that the CRA *did* have negative consequences
(especially in conjunction with the repeal of Glass-Steagall Act).
"Economist Stan Liebowitz wrote in the New York Post that a strengthening of the CRA in the 1990s encouraged a loosening of lending standards throughout the banking industry.[47] In a commentary for CNN, Congressman Ron Paul, who serves on the United States House Committee on Financial Services, charged that the CRA with "forcing banks to lend to people who normally would be rejected as bad credit risks."[55] A Christian Science Monitor editorial also mentions the Community Reinvestment Act and the government-backed Fannie Mae as being laws responsible for pushing banks and mortgage brokers into granting easy credit and subprime loans to those who could not afford them.[56]
"In a Wall Street Journal opinion piece, Austrian school economist Russell Roberts wrote that the CRA subsidized low-income housing by pressuring banks to serve poor borrowers and poor regions of the country. Jeffrey A. Miron, a senior lecturer in economics at Harvard University, in an opinion piece for CNN, goes so far as to call for "getting rid" of Fannie Mae and Freddie Mac, as well as policies like the Community Reinvestment Act that "pressure banks into subprime lending."[57]"
Parent
Re: (Score:3, Insightful)
He's on the Congress' Financial Services Committee. He didn't get there by being stupid. (shrug). And if you still don't like him, then I suggest you read Walter E. Williams work. He's an economics professor at George Mason University in D.C. and he's no dummy either:
http://www.gmu.edu/departments/economics/wew [gmu.edu]
BTW:
I always find it amusing that pro-socialists think "he's a weirdo" is a persuasive argument. Sorry but that doesn't really sway me to your viewpoint. ;-) Next time try a logical argument b
Re:*illegal* scammers (Score:5, Informative)
I don't have to convince you of anything.
But let me ask a simple question; if it was the mean ol' government forcing these noble banks to make loans to people who wouldn't pay them back...
Why were so many of these bad loans made by banks that weren't being told to make them by the government? Why were so many of these loans made that had zero connection to either Freddie Mac or Fannie Mae? Why won't any of you the-free-market-always-works types answer these questions?
Parent
Re: (Score:3, Insightful)
Remember? It was back in the Clinton era, and there was a Fannie Mae accounting scandal, and in lieu of the serious reforms they were like "oh yeah yeah we'll be Nice instead and try to extend home ownership to even more Americans, even lower-incme ones!" Yay Subprime!
And, of course, bad money drives out the good. We're lucky there were as many responsible or quasi-responsible banks as there were. And three cheers for two candidates (fou
Cyber-vultures. Brilliant. (Score:3)
Re: (Score:3, Funny)
But what about the real scam? (Score:5, Insightful)
That allows investment bankers to pawn off responsibility for their misdeeds on the American public?
So I'm supposed to pay an additional $10k in taxes to finance the bad decisions of those who foreclosed on middle class Americans? And if I have to pay it over time (as Congress proposed), I'll end up paying even more (because Congress will borrow money to finance the bailout).
I would say that I've got that money in my 401k, but I doubt it's worth anything now.
I've got a better idea. Start printing money. Yes, devalue the currency to the point where I can settle my mortgage for a few hours worth of work. If bank CEOs can get bonuses for shafting even the Americans who were smart enough to avoid bad lending practices, we should be able to just print the money to pay off our debts.
Re:But what about the real scam? (Score:5, Insightful)
Yeah, but then your retirement becomes essentially worthless...
It's wrong that we're paying for their mistakes, and we will be paying for that for YEARS to come.
This is not capitalism - by influencing the market (especially so heavily) and giving money to institutions just because they're 'a huge part of the economy' we gave up capitalism. These people fucked up - by the tenets of capitalism, if they can't survive this on their own, LET THEM FAIL. Oh, boo hoo, a tough few years. Better than going even further into debt just to bail out a few rich pricks who made the mistake of doing things where the benefits were far outweighed by the costs and potential risks.
Parent
Re: (Score:3, Insightful)
Yeah, but then your retirement becomes essentially worthless..
Your retirement is worthless. We aren't raising enough kids, so the economy won't be able to support us retiring.
Re: (Score:3, Insightful)
These people fucked up - by the tenets of capitalism, if they can't survive this on their own, LET THEM FAIL. Oh, boo hoo, a tough few years. Better than going even further into debt just to bail out a few rich pricks who made the mistake of doing things where the benefits were far outweighed by the costs and potential risks.
It's known as the US system of quasi-capitalomarxism called "Socialism for the rich, capitalism for the poor."
Re:But what about the real scam? (Score:5, Interesting)
Sadly your idea of printing money to devalue it to the point where you can easily pay off your debts would work, but only if the US was self-sustaining, which it isn't. And I doubt you'd get the Chinese to agree to devaluing the US Dollar much more, they seem to have a very large amount of US dollars in their hands... some sort of insane trade deficit? They'd probably invade the US to over-throw the government and attempt to stop the devaluation of the currency (and their investment). Somehow I see world war 3 coming out of this royal fuck up by the US.
It's times like these I'm so happy to live in Canada, and look forward to enjoying the nuclear winter that's inevitibly coming sooner rather than later.
Parent
Yeah sure. (Score:2)
China invading to stop the dollar losing value.
The Canadian pot is obviously top drawer quality.
Re: (Score:2)
They'd probably invade the US to over-throw the government and attempt to stop the devaluation of the currency (and their investment). Somehow I see world war 3 coming out of this royal fuck up by the US.
China doesn't have the navy to invade the US. It may or may not be able to nuke the US, but if it does, their investment in Chinese cities will be devalued.
Our (I'm in the US) standard of living will probably drop, once we can't buy valuable stuff from China for dollars is doesn't cost us anything to produc
Re:But what about the real scam? (Score:5, Insightful)
While things are certainly going to be bad you have badly misread what is happening.
(1) The liquidity crisis is actually preventing inflation and there is a good chance that we could even witness some deflation if things don't change. Economic downturns are not necessarily couple with inflation, in fact we could even see deflation during this recession.
(2) Treasuries (U.S. Debt) have become even more valuable. Yields are almost effectively zero while prices are sky high. This is because everyone is so afraid of the markets that they are running to pick up the safest instrument available: U.S. debt. You really think China or anyone else will dump treasuries? Where would they put the money? Europe? China? Russia? Europe is as screwed as we are while Russia and China are even worse.
(3) The U.S. Dollar has actually been gaining value lately, likely due to point #2.
(4) "Buy land, seeds, guns and ammo cause Darwin is going to come knocking for the slow and trusting. Real assets are the only hard currency left." This is a nonsensical point. In order for "Real Assets" to trump cash it is likely that we would need a total failure in the rule of law, at which point having bought land or seeds would be meaningless as anyone with a gun would simply take them. Logic points to a couple years of slow or negative growth, not the collapse of society. I bet you spent Y2K in a basement.
You can have your land and seeds, I am going to start accumulating value stocks at all time lows.
Parent
Re: (Score:3, Funny)
The difference is that we're hearty lumberjacks ...
So you sleep all night and work all day?
Bad spending and bad lending. (Score:5, Insightful)
Government don't want to tighten their belts because that's an instant turn off to the voters. Nope, rather rack up more debt and hope that you die or leave office before the shit hits the fan.
Parent
Re:But what about the real scam? (Score:5, Insightful)
The bailout isn't a bailout. The bankers who screwed up are for the most part being wiped out, along with the investors. Please see AIG, LEH and BS stock prices and you will see that the company owners and the company employees are being entirely wiped out. The "bailout" is preventing the guys who screwed up and are wiped out from wiping out everyone else. Its about liquidity and fear. Good companies are being destroyed due to too much fear and too little liquidity. It isn't a lie when the Fed says that most of what will be bought with the $700 million will be good or profitable. So the feds loose a couple hundred mil on this. Several trillions are being wiped out every week in the stock market.
Parent
not just phishing mails.. (Score:5, Funny)
Yep. (Score:5, Funny)
Yeah, right! I fell for that one four years ago!
Re: (Score:3, Insightful)
One of the scammers was so brazen he came right to my doorstep! Said he needed a "contribution" so he could "go to Washington" and "fix this mess."
Yeah, right! I fell for that one four years ago!
We call those guys "incumbents"
Your default position this election season should be not voting for them.
Don't listen to campaign promises, look at the incumbent's voting history.
A solution to the financial crisis (Score:3, Funny)
Scammers? (Score:2, Funny)
Hell, the elections bring 'em out every two years.
Bringing out Scammers?? (Score:5, Insightful)
Bernanke (Score:4, Funny)
Dear BENJAMIN BERNANKE,
I am the Chairmen of the Nigerian Treasury. I have recently come into the possession of inheritance from the Esteemed Master Defenestrator . Unfortunately I cannot use take possession of his honorableness's inheritance locally. I therefore must move it into a foreign account. For the sum of 700 (SEVEN HUNDRED) BILLION UNITED STATES DOLLARS (USD$) I can deposit this into your banking reserve system. You may keep 15% (fifteen percent) of the total amount for your troubles.
We look forward to your correspondence. Please make your time.
Sincerly,
Chuck Norris
Make it an even trillion! (Score:5, Funny)
Dear Mr. Norris,
Why don't we make it an even $1,000,000,000,000 (ONE TRILLION) dollars [politico.com]? We can use the extra $300,000,000,000 (THREE HUNDRED BILLION) dollars to buy up mortgages so that taxpayers lose money when the loans default, instead of the banks. My economists are convinced that it's a great way to prove that I'm actually a Socialist who understands the economy so that those loony liberals elect me instead of that one.
I look forward to your reply, my friends.
Sincerely,
John Sidney McCain
Parent
Dagnabit (Score:3)
There goes my strategy for recovering my stock market losses!
hmmmmmm (Score:5, Insightful)
Perhaps the concern is unfounded as this PC World article notes. The article states that more than half of us are deleting messages from banks and financial institutions without even thinking twice. Experts say recipients who receive these e-mails believe that all the messages are part of phishing e-mail scams.
So more than half of the 16 bazillion people are ignoring them?
My guess is that five bazillon are responding.
Think about that.
Fake numbers but you get my point.
qz
My SOP for Bank E-mails (Score:5, Informative)
1. Delete e-mail.
2. Log in to bank via their web site.
What scares me is that while this guards against the garden variety phishing attack, it can't protect me from an ISP DNS compromise. Running *NIX on your home PC or using a Mac can't protect you from that either, so don't get smug. It's a good idea to find an "obscure" yet stable feature on your bank's site. Phishing sites may not take the time to duplicate it. If you know the bank is based in New York, and you traceroute it to Bulgaria, that's a bad sign too. I have to admit I'm not that paranoid though.
At the very least, 1 and 2 should be SOP for everybody. Financial institutions shouldn't put any kind of hypertext in a mail, and really ought not to even be using HTML mail which was evil right from its inception. I can dream, can't I?
Re: (Score:3, Informative)
What scares me is that while this guards against the garden variety phishing attack, it can't protect me from an ISP DNS compromise.
Please stop spreading FUD. SSL certificates protect against DNS compromises, because your browser's database of certificate authorities does not depend on DNS to operate. As long as you use your bookmark (instead of clicking the link in the e-mail) and you see the little padlock icon and you don't get a warning message about a problem with the certificate, you're fine.
I say use a bookmark because https://www.bankofarnerica.com/ [bankofarnerica.com] and https://www.weilsfargo.com/ [weilsfargo.com] look pretty close to legitimate (depending on
LOL!!! Truth stranger than scammers. (Score:3, Funny)
Correlating Gov't announcments and the Market... (Score:5, Funny)
That has nothing to do with the problem. (Score:2)
The problem is lack of regulation of complex financial instruments and how political campaigns are financed in the US.
The corrupt lobbying of US politicians ensures that regulation is as light as possible.
does too (Score:2)
money created from debt is the problem, our particular type of fiat currency has that problem too. a pyramid scheme to create increased debt is required for the system to function
Re:Of course, it was caused by scammers. (Score:5, Funny)
Always a bad move basing a currency upon poorly made Italian cars.
Parent