Friday, June 22, 2007

Defrauding the Public

Add this to your list of requirements for the next President - a financial savvy. Then again, scratch that. Our politicians get big bucks from these firms precisely not to look too hard at what they do. So the next time someone complains about oil and gas companies getting rich, hit them in the head and ask them to stop fighting yesterday's villians. You thought the Enron mess cleaned up Wall Street - think again!

Bloomberg reported on the ridiculous defrauding of public authorities by collusion among investment banks, insurance companies, underwriters and attorneys. Municipal agencies pay through their nose in fees to float a bond issue to build low-income housing or improve schools, then the companies collude to make sure the money is never spent, instead using the money to invest and generating fat fees for the investment banks, minimizing risk for the insurers. And in the end, little, or often no, money goes into schools or housing, the municipal authority just buys back all the bonds and ends up poorer for the experience.

If this doesn't make your blood boil, you must be dead or an investment banker! I'm all for capitalism and even greed, but this isn't that - it's FRAUD!

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