One way or another, that money is coming out of your retirement account. Think of it like the old movie The Sting. High-speed traders already know who has won the horse race when your mutual fund manager lays his bet. You’re guaranteed to come out a loser. You’re losing in small increments, but every mickle makes a muckle — especially in a tough market.
— Make $377,000 trading Apple in one day
Financial innovation! The system works!
The most memorable incidents in earth-changing events are sometimes the most banal. In the rapidly spreading scandal of LIBOR (the London inter-bank offered rate) it is the very everydayness with which bank traders set about manipulating the most important figure in finance.
—The Economist: The rotten heart of finance
It’s getting harder and harder to believe that the system isn’t thoroughly rigged by the bankers. Heads or tails, they win and everyone else pays for it.
Barclays was also accused of “aiding attempts by other banks to manipulate” interest rates, further underscoring the clubby nature of Wall Street. In some cases, bank employees coordinated with former colleagues who worked at rival firms as a way to manipulate the rates, according to the regulatory documents.
—Ben Protess & Mark Scott: Barclays CEO Resigns as Bank Frames a Defense
Seriously, it’s RICO time.
AT&T Inc. got more than $16 million from the U.S. government to offer a calling service for the deaf that the company knew was being used by Nigerian fraudsters to steal from American merchants, the Justice Department said.
—AT&T Accused of Billing U.S. for Nigerian Fraud Calls
JPMorgan Chase & Co. took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years, current and former employees say.
—OCC Probing JPMorgan Chase Credit Card Collections
If private-equity firms are as good at remaking companies as they claim, they don’t need tax loopholes to make money.
—James Surowiecki: Private Inequity