Bank fraud and Dieselgate: how do we design regulations that are harder to cheat?

Tim Harford points out that Dieselgate -- when VW designed cars that tried to guess when they were undergoing emissions test and dial back their pollution -- wasn't the first time an industry designed its products to cheat when regulators were looking; the big banks did the same thing to beat the "stress tests" that finance regulators used to check whether they would collapse during economic downturns (the banks "made very specific, narrow bets designed to pay off gloriously in specific stress-test scenarios" so that they looked like they'd do better than they actually would). Read the rest

Multigenerational wealth makes white Americans richer than black Americans

Black American wage disparity can be offset by education; but even though black American families -- one parent, two parent, educated, uneducated, employed, unemployed -- save more and spend less than their white counterparts, white families have substantially more wealth than black families -- college-educated white adults have 7.2 times the wealth of their black counterparts. Read the rest

New Senator from California can't explain why she didn't prosecute Trump's Treasury pick when she was AG

Kamala Harris was just sworn in as a senator from California, but her last gig was as California's Attorney General, and in that role, she decided not to prosecute Trump Treasury Secretary pick Steve Mnuchin, whom her office had identified as presiding over "widespread misconduct" in foreclosing on Californians -- that is, stealing their houses. Read the rest

China's anti-money-laundering rules could burst Canada's real-estate bubble

China has adopted stringent new anti-money-laundering rules that will make it nearly impossible for small investors -- for example, middle-class families who pool their savings -- to get their money out of the country in order to buy condos in Canada's superheated property market (not just Canada, of course!). Read the rest

Leaked doc shows Trump Treasury pick presided over the "widespread" theft of Americans' homes

Steve Mnuchin, Trump's pick for Secretary of Treasury, has a checkered past (he once foreclosed on a 90 year old customer who was $0.27 short on her mortgage payment) but a leaked memo from the California attorney general's Consumer Law Section reports that Mnuchin's leadership of Onewest Bank involved "widespread misconduct" in foreclosing on Californians, through which the bank was able to fraudulently confiscate their customers' homes. Read the rest

July: Vancouver imposes a 15% tax on foreign real estate speculators; September: home sales drop by a third

Vancouver has been wracked by a white-hot property bubble driven primarily by offshore speculators, mostly Chinese, who have driven up the price of housing beyond the means of working Vancouverites, crippling the city's daily life as workers, students and families struggle to find somewhere -- anywhere -- to live. Read the rest

Manhattan apartment sales are down 20% in Q3

Sales of Manhattan co-ops and condos have plunged 20% in Q316, relative to the same quarter last year -- sales in excess of asking price dropped from 35% to 17%; days on market before sale increased from 67 to 72; median growth in sale price fell to 2.6% from 18%. Read the rest

Petition: make the FBI explain why they didn't bring criminal charges against bank execs

Last month, Senator Elizabeth Warren published an open letter to FBI director James Comey observing that, in revealing details of its investigation into the Clinton email scandal, the Bureau had seemingly abandoned its longstanding policy of not sharing its deliberations, meaning that there was no longer any reason to keep secret its reasoning for not bringing criminal charges against the bankers who did trillions of dollars' worth of damage to the world economy, sparking wars, starvation, and personal ruin for millions of people. Read the rest

Whistleblowing Wells Fargo loan officer describes years of fraudulent, criminal culture in the bank

Beth Jacobson was a Wells Fargo loan officer who blew the whistle on the bank's predatory, racist loan-fraud in the runup to the 2008 financial crisis, which tanked the world's economy and nearly wiped out Wells Fargo (they were rescued with a $36B taxpayer-funded bailout). Read the rest

John Oliver on subprime auto-lending and its killswitches

We've been following the trade in remote kill-switches for cars sold to subprime borrowers since 2009, and watched in dismay as they got worse and worse: though John Oliver's report on the billions inflating the subprime auto-lending bubble touches on these, he focuses on the economic factors -- sleaze, corruption, moral hazard -- driving the tech. Read the rest

How and why to short Uber

Uber's $62.5B valuation is an utterly speculative bet on a company that can only pay out if many sub-bets pay off: the timely arrival of self-driving cars, widespread adoption of car-sharing (rather than private self-driving car ownership), no effective competition from other hailing companies (including those backed by the car manufactuers), regulatory reform to legalize its practices, and smooth sailing for its massive subprime lending program for its drivers. Read the rest

The last time there were this many unsold $100M+ homes on the market, the world economy imploded

Depending on how much credence you give to "whisper listings," there are between 27 and 50 $100,000,000+ houses on the market; last year, only two houses in that bracket sold worldwide. Read the rest

Wells Fargo, who preyed on black borrowers, sponsors Black Lives Matter luncheon

Wells Fargo has been widely criticized for its predatory, deceptive practice of targeting black mortgage borrowers with subprime mortgages (whose teaser rates ballooned into unsustainable long-term rates after a few years), rather than offering those borrowers much cheaper and better mortgages that would not have led to widespread bankruptcy, foreclosure, and the destruction of hardworking families' live savings. Read the rest

A new, made-in-China subprime crisis

As China's banks struggle under the weight of never-to-be-repaid subprime loans (which were turned into bonds using the same trick that produced the US/EU subprime crisis), the Chinese government is throwing money at them to loan out to ever-dodgier borrowers, just to change the ratio of delinquent debts to ones that have yet to turn delinquent. Read the rest

Charter schools are turning into the next subprime mortgages

Subprime mortgages began as a project to extend credit to poor people to give them a bridge to home-ownership, but it did so by allowing unscrupulous lenders to offer credit on unfair terms, with government guarantees to back the loans, even the bad ones. Read the rest

Caterpillar's heavy vehicles are killswitched subprime computers on wheels

In an earnings call in which Caterpillar execs explained their dismal takings to investors, Cat execs explained their plan to grow by leasing tractors to Chinese companies with crummy track-records for payment. Read the rest

Suit: Wells Fargo sent contractors to break into our house, loot family treasures rescued from Nazis

David Adier missed two mortgage payments on his home in Morris Township, NJ, so Wells Fargo, his mortgage lender, sent contractors who illegally broke in and "trashed-out" his home as though it was abandoned, stealing the family treasures his father smuggled out of Nazi-occupied France. Read the rest

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