1.
Charles Ponzi
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Charles Ponzi, born Carlo Ponzi, was an Italian swindler and con artist in the U. S. and Canada. His aliases include Charles Ponci, Carlo, and Charles P. Bianchi, born and raised in Italy, he became known in the early 1920s as a swindler in North America for his money-making scheme. In reality, Ponzi was paying early investors using the investments of later investors, while this swindle predated Ponzi by several years, it became so identified with him that it now bears his name. His scheme ran for over a year before it collapsed, costing his investors $20 million, Ponzi may have been inspired by the scheme of William F. Miller, a Brooklyn bookkeeper who in 1899 used the same scheme to take in $1 million. Charles Ponzi was born Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi in Lugo, Italy and he told The New York Times that he had come from a family in Parma, Italy. His ancestors had been well to do, and his continued to use the title Dona. He took a job as a postal worker early on, and his richer friends considered the university a four-year vacation, and he was inclined to follow them around to bars, cafés, and the opera. This resulted in Ponzi spending off all his money and four years later, he was left broke, during this time, a number of Italian boys were migrating to the United States and returning to Italy as rich people. Ponzis family encouraged him to do the same thereby returning his family to its lost glory, on November 15,1903, he arrived in Boston aboard the S. S. Vancouver. By his own account, Ponzi had $2.51 in his pocket, I landed in this country with $2.50 in cash and $1 million in hopes, and those hopes never left me, he later told The New York Times. He quickly learned English and spent the few years doing odd jobs along the East Coast, eventually taking a job as a dishwasher in a restaurant. He managed to work his way up to the position of waiter, by this time, Ponzi had a charming cheerful personality and spoke French, English and Italian, which Zuckoff says helped him get the job at Banco Zarossi. It was here that Ponzi first saw how the scheme of Robbing Peter to pay Paul, Zarossi paid 6% interest on bank deposits – double the going rate at the time – and was growing rapidly as a result. Ponzi eventually rose to bank manager, the bank eventually failed and Zarossi fled to Mexico with a large portion of the banks money. Ponzi stayed in Montreal and, for time, lived at Zarossis house helping the mans abandoned family, while planning to return to the United States. As Ponzi was penniless, this proved to be very difficult, confronted by police who had taken note of his large expenditures just after the forged check was cashed, Ponzi held out his hands wrist up and said Im guilty. He ended up spending three years at St. Vincent-de-Paul Federal Penitentiary, a facility located on the outskirts of Montreal. Rather than inform his mother of this development, he posted her a letter stating that he had found a job as an assistant to a prison warden
Charles Ponzi
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Ponzi in 1920, while still working as a businessman in his office in Boston
Charles Ponzi
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Ponzi aka "Charles Bianchi" under arrest circa 1910
2.
Fraud
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In law, fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud itself can be a wrong, a criminal wrong or it may cause no loss of money, property or legal right. The purpose of fraud may be monetary gain or other benefits, a hoax is a distinct concept that involves deliberate deception without the intention of gain or of materially damaging or depriving a victim. In common law jurisdictions, as a wrong, fraud is a tort. Proving fraud in a court of law is said to be difficult. In cases of a fraudulently induced contract, fraud may serve as a defense in an action for breach of contract or specific performance of contract. Fraud may serve as a basis for a court to invoke its equitable jurisdiction, in common law jurisdictions, as a criminal offence, fraud takes many different forms, some general and some specific to particular categories of victims or misconduct. The elements of fraud as a crime similarly vary, section 380 of the Criminal Code provides the general definition for fraud in Canada,380. In addition to the penalties outlined above, the court can issue a prohibition order under s.380.2. It can also make an order under s.380.3. The Canadian courts have held that the offence consists of two elements, A prohibited act of deceit, falsehood or other fraudulent means. The Supreme Court of Canada has held that deprivation is satisfied on proof of detriment, prejudice or risk of prejudice, it is not essential that there be actual loss. Deprivation of confidential information, in the nature of a secret or copyrighted material that has commercial value, has also been held to fall within the scope of the offence. The BBC World Service reported in 2012 that the value lost through fraud in the UK was £66 billion a year. According to a review by the UK anti-fraud charity Fraud Advisory Panel business fraud accounted for £144bn, the FAP has been particularly critical of the support available from the police to victims of fraud in the UK outside of London. In July 2016 it was reported that fraudulent activity levels in the UK increased in the 10 years to 2016 from £52 billion to £193bn. This figure would be an estimate, since as the former commissioner of the City of London Police, Adrian Leppard, has said. Donald Toon, director of the NCAs economic crime command, stated in July 2016, Fraud affects one in ten people in the UK
Fraud
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A possibly fraudulent "work from home" advertisement.
Fraud
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A fraudulent Manufacturer's Suggested Retail Price on a speaker.
3.
Charles Dickens
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Charles John Huffam Dickens was an English writer and social critic. He created some of the worlds best-known fictional characters and is regarded by many as the greatest novelist of the Victorian era and his works enjoyed unprecedented popularity during his lifetime, and by the twentieth century critics and scholars had recognised him as a literary genius. His novels and short stories enjoy lasting popularity, born in Portsmouth, Dickens left school to work in a factory when his father was incarcerated in a debtors prison. Dickenss literary success began with the 1836 serial publication of The Pickwick Papers, within a few years he had become an international literary celebrity, famous for his humour, satire, and keen observation of character and society. His novels, most published in monthly or weekly instalments, pioneered the publication of narrative fiction. The instalment format allowed Dickens to evaluate his audiences reaction, and he modified his plot. For example, when his wifes chiropodist expressed distress at the way Miss Mowcher in David Copperfield seemed to reflect her disabilities and his plots were carefully constructed, and he often wove elements from topical events into his narratives. Masses of the poor chipped in hapennies to have each new monthly episode read to them, opening up. Dickens was regarded as the literary colossus of his age and his 1843 novella, A Christmas Carol, remains popular and continues to inspire adaptations in every artistic genre. Oliver Twist and Great Expectations are also adapted, and, like many of his novels. His 1859 novel, A Tale of Two Cities, set in London, Dickens has been praised by fellow writers—from Leo Tolstoy to George Orwell and G. K. Chesterton—for his realism, comedy, prose style, unique characterisations, and social criticism. On the other hand, Oscar Wilde, Henry James, and Virginia Woolf complained of a lack of depth, loose writing. The term Dickensian is used to something that is reminiscent of Dickens and his writings. Charles John Huffam Dickens was born on 7 February 1812, at 1 Mile End Terrace, Landport in Portsea Island and his father was a clerk in the Navy Pay Office and was temporarily stationed in the district. He asked Christopher Huffam, rigger to His Majestys Navy, gentleman, Huffam is thought to be the inspiration for Paul Dombey, the owner of a shipping company in Dickenss eponymous Dombey and Son. In January 1815 John Dickens was called back to London, when Charles was four, they relocated to Sheerness, and thence to Chatham, Kent, where he spent his formative years until the age of 11. His early life seems to have been idyllic, though he himself a very small. Charles spent time outdoors but also read voraciously, including the novels of Tobias Smollett and Henry Fielding, as well as Robinson Crusoe
Charles Dickens
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Dickens in New York, 1867
Charles Dickens
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Charles Dickens's birthplace, 393 Commercial Road, Portsmouth
Charles Dickens
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2 Ordnance Terrace,
Chatham, Dickens's home 1817 – May 1821
Charles Dickens
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Illustration by Fred Bernard of Dickens at work in a shoe-blacking factory after his father had been sent to the
Marshalsea, published in the 1892 edition of Forster's Life of Dickens
4.
Martin Chuzzlewit
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The Life and Adventures of Martin Chuzzlewit is a novel by Charles Dickens, considered the last of his picaresque novels. It was originally serialised between 1842 and 1844, Dickens thought it to be his best work, but it was one of his least popular novels. Like nearly all of Dickens novels, Martin Chuzzlewit was released to the public in monthly instalments, early sales of the monthly parts were disappointing, compared to previous works, so Dickens changed the plot to send the title character to America. This allowed the author to portray the United States satirically as a wilderness with pockets of civilisation filled with deceptive. The main theme of the novel, according to a preface by Dickens, is selfishness, the novel is also notable for two of Dickens great villains, Seth Pecksniff and Jonas Chuzzlewit. It is dedicated to Angela Georgina Burdett-Coutts, a friend of Dickens, Martin Chuzzlewit has been raised by his grandfather and namesake. Years before, Martin senior took the precaution of raising an orphaned girl and she is to be his nursemaid, with the understanding that she will be well cared for only as long as Martin senior lives. She thus has strong motivation to promote his well-being, in contrast to his relatives, however, his grandson Martin falls in love with Mary and wishes to marry her, ruining Martin seniors plans. When Martin refuses to give up the engagement, his grandfather disinherits him, Martin becomes an apprentice to Seth Pecksniff, a greedy architect. Instead of teaching his students, he lives off their tuition fees and has them do draughting work that he passes off as his own and he has two spoiled daughters, nicknamed Cherry and Merry, having been christened as Charity and Mercy. Unbeknown to Martin, Pecksniff has actually taken him on to establish ties with the wealthy grandfather. Young Martin befriends Tom Pinch, a soul whose late grandmother had given Pecksniff all she had, believing Pecksniff would make an architect. Pinch is incapable of believing any of the bad things others tell him of Pecksniff, Pinch works for exploitatively low wages, while believing he is the unworthy recipient of Pecksniffs charity. When Martin senior hears of his grandsons new life, he demands that Pecksniff kick young Martin out, then, Martin senior moves in and falls under Pecksniffs control. During this time, Pinch falls in love with Mary, but does not declare it, one of Martin seniors greedy relatives is his brother, Anthony Chuzzlewit, who is in business with his son, Jonas. Despite considerable wealth, they live miserly, cruel lives, with Jonas constantly berating his father, eager for the old man to die so he can inherit, Anthony dies abruptly and under suspicious circumstances, leaving his wealth to Jonas. Jonas then woos Cherry, whilst arguing constantly with Merry, Jonas, meanwhile, becomes entangled with the unscrupulous Montague Tigg and joins in his pyramid scheme-like insurance scam. At the beginning of the book he is a petty thief and hanger-on of a Chuzzlewit relative, Tigg cheats young Martin out of a valuable pocket watch and uses the funds to transform himself into a seemingly fine man called Tigg Montague
Martin Chuzzlewit
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Cover, first serial edition seventh instalment, July 1843
Martin Chuzzlewit
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Old Martin and Mary
Martin Chuzzlewit
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A Game of Love
Martin Chuzzlewit
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Tom Pinch at the Organ.
5.
Little Dorrit
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Little Dorrit is a novel by Charles Dickens, originally published in serial form between 1855 and 1857. It satirises the shortcomings of both government and society, including the institution of debtors prisons, where debtors were imprisoned, unable to work, the prison in this case is the Marshalsea, where Dickenss own father had been imprisoned. In addition he satirises the stratification of society that results from the British class system, Little Dorrit was published in nineteen monthly instalments, each consisting of 32 pages with two illustrations by Hablot Knight Browne whose pen name was Phiz. Each instalment cost a shilling except for the last, an issue which cost two shillings. Arthur Clennam is returning to London to see his mother after the death of his father, with whom he had lived for twenty years in China. On his deathbed, his father had him a mysterious watch murmuring Your mother, which Arthur naturally assumed was intended for Mrs. Clennam. Inside the watch casing was an old paper with the initials DNF worked into it in beads. It was a message, but when Arthur showed it to the harsh and implacable Mrs Clennam, a fanatic, she refused to tell him what it meant. Little Dorrit, devoted to her father, has been supporting them both through her sewing, once in London, Arthur is reacquainted with his former fiancée Flora Finching, who is now overweight and simpering. His supposed mother, Mrs Clennam, though arthritic and wheelchair-bound, still runs the business with the help of her servant Jeremiah Flintwinch. When Arthur learns that Mrs Clennam has employed Little Dorrit as a seamstress, showing her unusual kindness, suspecting his mother was partially responsible for the misfortunes of the Dorrits, Arthur follows the girl to the Marshalsea. He vainly tries to inquire about William Dorrits debt in the poorly run Circumlocution Office, assuming the role of benefactor towards Little Dorrit, her father, and her brother. While at the Circumlocution Office he meets the struggling inventor Daniel Doyce, the grateful Little Dorrit falls in love with Arthur, but Arthur fails to recognise Little Dorrits interest. At last, aided by the indefatigable rent-collector Pancks, Arthur discovers that William Dorrit is the lost heir to a large fortune, the newly freed Dorrit decides that they should tour Europe as a newly respectable family. They travel over the Alps and take up residence for a time in Venice, eventually, after a spell of delirium, William Dorrit dies as does his distraught brother Frederick, a kind-hearted musician who has always stood by him. Little Dorrit, left alone, returns to London to stay with newly married Fanny and her husband, the foppish Edmund Sparkler. The fraudulent dealings of Edmund Sparklers stepfather, Mr. Merdle, end with Merdles suicide and the collapse of his bank business, Clennam is now himself imprisoned in the Marshalsea, where he becomes ill and is nursed back to health by Amy. The French villain Rigaud, now in London, discovers that Mrs. Clennam has been hiding the fact that Arthur is not her real son, the latter insisted on bringing up little Arthur and denying his mother the right to see him
Little Dorrit
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Cover of serial Vol. 4, March 1856
Little Dorrit
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Mr Flintwinch has a mild attack of
irritability
Little Dorrit
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Engraving of "Little Dorrit", 1856
6.
Arbitrage
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For instance, an arbitrage is present when there is the opportunity to instantaneously buy low and sell high. People who engage in arbitrage are called arbitrageurs /ˌɑːrbᵻtrɑːˈʒɜːr/—such as a bank or brokerage firm, the term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies. Arbitrage is a French word and denotes a decision by an arbitrator or arbitration tribunal, an arbitrage equilibrium is a precondition for a general economic equilibrium. The no arbitrage assumption is used in finance to calculate a unique risk neutral price for derivatives. This refers to the method of valuing a coupon-bearing financial instrument by discounting its future cash flows by multiple discount rates, by doing so, a more accurate price can be obtained than if the price is calculated with a present-value pricing approach. Arbitrage-free pricing is used for bond valuation and to detect arbitrage opportunities for investors, for the purpose of valuing the price of a bond, its cash flows can each be thought of as packets of incremental cash flows with a large packet upon maturity, being the principal. Since the cash flows are dispersed throughout future periods, they must be discounted back to the present, in the present-value approach, the cash flows are discounted with one discount rate to find the price of the bond. In arbitrage-free pricing, multiple discount rates are used, the present-value approach assumes that the yield of the bond will stay the same until maturity. This is a model because interest rates may fluctuate in the future. The discount rate may be different for each of the flows for this reason. Each cash flow can be considered an instrument that pays one payment upon maturity. The discount rates used should be the rates of multiple bonds with maturity dates the same as each cash flow. By using multiple discount rates, the price is the sum of the discounted cash flows. Arbitrage-free price refers to the price at no price arbitrage is possible. The ideas of using multiple discount rates obtained from zero-coupon bonds, the yield curve is a curve of the yields of the same bond with different maturities. This curve can be used to view trends in market expectations of how interest rates move in the future. In arbitrage-free pricing of a bond, a curve of similar zero-coupon bonds with different maturities is created. If the curve were to be created with Treasury securities of different maturities and this is to transform the bonds into zero-coupon bonds
Arbitrage
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Grey market
7.
International reply coupon
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IRCs are accepted by all UPU member countries. UPU member postal services are obliged to exchange an IRC for postage, the purpose of the IRC is to allow a person to send someone in another country a letter, along with the cost of postage for a reply. The IRC was introduced in 1906 at a Universal Postal Union congress in Rome, at the time an IRC could be exchanged for a single-rate, ordinary postage stamp for surface delivery to a foreign country, as this was before the introduction of airmail services. An IRC is exchangeable in a UPU member country for the postage of a priority or unregistered airmail letter to a foreign country. The current IRC, which features the theme Water for Life, designed by Czech artist, IRCs are ordered from the UPU headquarters in Bern, Switzerland by postal authorities. They are generally available at large post offices, in the U. S. they are requisitioned along with regular domestic stamps by any post office that has sufficient demand for them, prices for IRCs vary by country. In the United States in November 2012, the price was $2.20 USD, however. Britains Royal Mail also stopped selling IRCs on 18 February 2012, citing minimal sales, if the operators home country does not sell IRCs, then a foreign IRC may be used. Previous editions of the IRC, the Beijing model and all subsequent versions, consequently, a new IRC will be issued every three years. This subsequently became the fraudulent Ponzi scheme, in practice, the overhead on buying and selling large numbers of the very low-value IRCs precluded any profitability. International reply coupons are printed in ink on paper that has the letters “UPU” in large characters in the watermark. The front of each coupon is printed in French, the reverse side of the coupon, which has text relating to its use, is printed in German, English, Arabic, Chinese, Spanish, or Russian. Under Universal Postal Union’s regulations, participating countries are not required to place a control stamp or postmark on the international reply coupons that they sell. Therefore, some foreign issue reply coupons that are tendered for redemption may bear the name of the country rather than the optional control stamp or postmark. New coupons are valid until December 31,2017, the Nairobi Model was designed by Rob Van Goor, a graphic artist from the Luxembourg Post. It was selected from among 10 designs presented by Universal Postal Union member countries, Van Goor interpreted the theme of the contest – The Postage Stamp, A Vehicle for Exchange – by depicting the world being cradled by a hand and the perforated outline of a postage stamp. Heys Collection UPU IRC info UPU list of countries selling IRCs IRC info Some IRC illustrations and exchange guidelines International Reply Coupons and Ham Radio
International reply coupon
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An international reply coupon issued in Germany (1992)
International reply coupon
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A British 1 Shilling IRC issued in 1959.
8.
Hedge (finance)
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A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. In simple language, a hedge is used to any substantial losses or gains suffered by an individual or an organization. Hedging is the practice of taking a position in one market to offset, the word hedge is from Old English hecg, originally any fence, living or artificial. The use of the word as a verb in the sense of dodge, evade is first recorded in the 1590s, a typical hedger might be a commercial farmer. The market values of wheat and other crops fluctuate constantly as supply and demand for them vary, with occasional large moves in either direction. Based on current prices and forecast levels at harvest time, the farmer might decide that planting wheat is a good idea one season, once the farmer plants wheat, he is committed to it for an entire growing season. Due to the uncertainty of supply and demand fluctuations. One such transaction is the use of forward contracts, forward contracts are mutual agreements to deliver a certain amount of a commodity at a certain date for a specified price and each contract is unique to the buyer and seller. For this example, the farmer can sell a number of forward contracts equivalent to the amount of wheat he expects to harvest, once the forward contracts expire, the farmer will harvest the wheat and deliver it to the buyer at the price agreed to in the forward contract. Therefore, the farmer has reduced his risks to fluctuations in the market of wheat because he has already guaranteed a number of bushels for a certain price. However, there are many risks associated with this type of hedge. For example, if the farmer has a low yield year and he harvests less than the amount specified in the forward contracts, he must purchase the bushels elsewhere in order to fill the contract. This becomes even more of a problem when the lower yields affect the entire wheat industry and the price of wheat increases due to supply and demand pressures. Also, while the farmer hedged all of the risks of a price decrease away by locking in the price with a forward contract, another risk associated with the forward contract is the risk of default or renegotiation. The forward contract locks in an amount and price at a certain future date. Because of that, there is always the possibility that the buyer will not pay the amount required at the end of the contract or that the buyer will try to renegotiate the contract before it expires. Future contracts are another way our farmer can hedge his risk without a few of the risks that forward contracts have, future contracts are similar to forward contracts except they are more standardized. These contracts trade on exchanges and are guaranteed through clearinghouses, clearinghouses ensure that every contract is honored and they take the opposite side of every contract
Hedge (finance)
9.
Futures contract
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In finance, a futures contract is a standardized forward contract which can be easily traded between parties other than the two initial parties to the contract. The parties initially agree to buy and sell an asset for an agreed upon today, with delivery and payment occurring at a future point. Because it is a function of an asset, a futures contract is a derivative product. Contracts are negotiated at futures exchanges, which act as a marketplace between buyers and sellers, the buyer of a contract is said to be long position holder, and the selling party is said to be short position holder. For example, in gold trading, the margin varies between 2% and 20% depending on the volatility of the spot market. The first futures contracts were negotiated for agricultural commodities, and later contracts were negotiated for natural resources such as oil. The original use of futures contracts was to mitigate the risk of price or exchange rate movements by allowing parties to fix prices or rates in advance for future transactions. The Chicago Board of Trade listed the first-ever standardized exchange traded forward contracts in 1864, by 1875 cotton futures were being traded in Bombay in India and within a few years this had expanded to futures on edible oilseeds complex, raw jute and jute goods and bullion. The 1972 creation of the International Monetary Market, the worlds first financial futures exchange, in 1976, the IMM added interest rate futures on US treasury bills, and in 1982 they added stock market index futures. Although futures contract are oriented towards a future point, their main purpose is to mitigate risk of default by either party in the intervening period. In this vein, the futures exchange requires both parties to put up initial cash, or a bond, known as the margin. To mitigate the risk of default, the product is marked to market on a basis where the difference between the initial agreed-upon price and the actual daily futures price is reevaluated daily. If the margin account goes below a certain value set by the Exchange, then a call is made. This process is known as marking to market, thus on the delivery date, the amount exchanged is not the specified price on the contract but the spot value. Upon marketing the strike price is reached and creates lots of income for the caller. To minimize credit risk to the exchange, traders must post a margin or a performance bond, to minimize counterparty risk to traders, trades executed on regulated futures exchanges are guaranteed by a clearing house. The clearing house becomes the buyer to each seller, and the seller to each Buyer and this enables traders to transact without performing due diligence on their counterparty. Margin requirements are waived or reduced in cases for hedgers who have physical ownership of the covered commodity or spread traders who have offsetting contracts balancing the position
Futures contract
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Finance
Futures contract
10.
Insolvency
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Insolvency is the state of being unable to pay the money owed, by a person or company, on time, those in a state of insolvency are said to be insolvent. There are two forms, cash-flow insolvency and balance-sheet insolvency, cash-flow insolvency is when a person or company has enough assets to pay what is owed, but does not have the appropriate form of payment. For example, a person may own a house and a valuable car. Cash-flow insolvency can usually be resolved by negotiation, for example, the bill collector may wait until the car is sold and the debtor agrees to pay a penalty. Balance-sheet insolvency is when a person or company does not have enough assets to pay all of their debts, the person or company might enter bankruptcy, but not necessarily. Once a loss is accepted by all parties, negotiation is often able to resolve the situation without bankruptcy, a company that is balance-sheet insolvent may still have enough cash to pay its next bill on time. However, most laws will not let the company pay that bill unless it will help all their creditors. For example, an insolvent farmer may be allowed to people to help harvest the crop. While technical insolvency is a synonym for insolvency, cash-flow insolvency. The term cash-flow insolvent carries a connotation that the debtor is balance-sheet solvent. Cash-flow insolvency involves a lack of liquidity to pay debts as they fall due, balance sheet insolvency involves having negative net assets—where liabilities exceed assets. Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency, accounting insolvency happens when total liabilities exceed total assets. This is known as business turnaround or business recovery, implementing a business turnaround may take many forms, including keep and restructure, sale as a going concern, or wind-down and exit. In some jurisdictions, it is an offence under the laws for a corporation to continue in business while insolvent. In others, the business may continue under a declared protective arrangement while alternative options to achieve recovery are worked out, increasingly, legislatures have favored alternatives to winding up companies for good. It can be, in several jurisdictions, grounds for an action or even an offence. Debt restructurings are typically handled by professional insolvency and restructuring practitioners, and are less expensive. Although the term bankrupt may be used referring to a government and this is so because bankruptcy is governed by national law, there exists no entity to take over such a government and distribute assets to creditors
Insolvency
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Insolvency
11.
Hedge fund
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It is administered by a professional investment management firm, and often structured as a limited partnership, limited liability company, or similar vehicle. The name hedge fund originated from the long and short positions that the first of these funds used to hedge market risk. Over time, the types and nature of the hedging concepts expanded, today, hedge funds engage in a diverse range of markets and strategies and employ a wide variety of financial instruments and risk management techniques. Hedge funds are available only to certain accredited investors and cannot be offered or sold to the general public. Hedge funds have existed for decades, and became increasingly popular, growing to be a substantial fraction of asset management. Hedge funds are almost always open-ended and allow additions or withdrawals by their investors, the value of an investors holding is directly related to the fund net asset value. Many hedge fund investment strategies aim to achieve a return on investment regardless of whether markets are rising or falling. Hedge fund managers often invest money of their own in the fund they manage, a hedge fund typically pays its investment manager an annual management fee, and a performance fee. Both co-investment and performance fees serve to align the interests of managers with those of the investors in the fund, some hedge funds have several billion dollars of assets under management. The word hedge, meaning a line of bushes around a field, has long used as a metaphor for the placing of limits on risk. Early hedge funds sought to hedge specific investments against general market fluctuations by shorting the market, nowadays, however, many different investment strategies are used, many of which do not hedge risk. During the US bull market of the 1920s, there were numerous private investment vehicles available to wealthy investors. The sociologist Alfred W. Jones is credited with coining the phrase hedged fund and is credited with creating the first hedge fund structure in 1949, although this has been disputed. Jones referred to his fund as being hedged, a term commonly used on Wall Street to describe the management of investment risk due to changes in the financial markets. In the 1970s, hedge funds specialized in a single strategy, many hedge funds closed during the recession of 1969–70 and the 1973–1974 stock market crash due to heavy losses. They received renewed attention in the late 1980s, during the 1990s, the number of hedge funds increased significantly, funded with wealth created during the 1990s stock market rise. The increased interest was due to the aligned-interest compensation structure and the promise of high returns. Over the next decade hedge fund strategies expanded to include, credit arbitrage, distressed debt, fixed income, quantitative, US institutional investors such as pension and endowment funds began allocating greater portions of their portfolios to hedge funds
Hedge fund
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Financial market participants
12.
Allen Stanford
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Stanford was the chairman of the now defunct Stanford Financial Group of Companies. A fifth-generation Texan who once resided in Saint Croix, U. S. Virgin Islands, he holds dual citizenship, being a citizen of Antigua and Barbuda and he contributed millions of dollars to politicians in both Antigua and the United States amongst other countries. The Federal Bureau of Investigation raided Stanfords offices in Houston, Texas, Memphis, Tennessee, on February 27,2009, the SEC amended its complaint to describe the alleged fraud as a massive Ponzi scheme. He voluntarily surrendered to authorities on June 18,2009, on March 6,2012, Stanford was convicted on all charges except a single count of wire fraud. He is serving his 110-year sentence at United States Penitentiary, Coleman in Coleman, in September 2014, Stanford appealed his conviction, however, the appeals court rejected the appeal in October 2015. Stanford grew up in Mexia, Texas and his father, James Stanford, is former mayor of Mexia and a member of the Board of Directors of Stanford Financial Group. His mother, Sammie, is a nurse, after his parents divorced in 1959, Stanford and his brother went to live with their mother. Stanford graduated from Eastern Hills High School in Fort Worth, Texas, in 1974, Stanford graduated from Baylor University in Waco, Texas, earning a BA degree in finance. Stanford started in business in Waco, Texas, opening a gym that failed. His first success in business came from speculating in real estate in Houston after the Texas oil bubble burst in the early 1980s, the men made a fortune in the 1980s, buying up depressed real estate and selling it years later as the market recovered. After his father retired in 1993, Stanford took control of the company, Stanford moved to the Caribbean in the 1980s, first to Montserrat, then to Antigua. Early in 2007, Stanford and Baldwin Spencer, prime minister of Antigua and Barbuda and formerly an ally, began verbally feuding in public. Reports surfaced in early February 2009 that the SEC, the FBI, the Florida Office of Financial Regulation, and the Financial Industry Regulatory Authority, a former executive told SEC officials that Stanford presented hypothetical investment results as actual historical data in sales pitches to clients. Stanford claimed his certificates of deposit were as safe as, or safer than, the U. S. Ambassador to the Bahamas at the time was reported to have managed to stay out of any one-on-one photos with Stanford during a charity breakfast event. Federal agents raided the offices of Stanford Financial on February 17,2009, the SEC charged Stanford with massive ongoing fraud centered on an eight-billion-dollar investment scheme. Stanfords assets, along with those of his companies, were frozen and placed into receivership by a U. S. federal judge, CNBC reported that Stanford tried to flee the country on the same day as the raids on his headquarters. He contacted a private jet owner and attempted to pay for a flight to Antigua with a credit card, but was refused because the company would accept only a wire transfer. On February 19, acting at the request of the SEC, FBI agents located Stanford at his girlfriends house near Fredericksburg, Virginia, the SEC often files civil charges before criminal charges are filed
Allen Stanford
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Robert Allen Stanford
mug shot, 2009
Allen Stanford
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Federal Detention Center, Houston, where Stanford was held
13.
Bank run
–
When they transfer funds to another institution it may be characterised as a capital flight. As a bank run progresses, it generates its own momentum, as more people withdraw cash and this can destabilize the bank to the point where it runs out of cash and thus faces sudden bankruptcy. A systemic banking crisis is one where all or almost all of the capital in a country is wiped out. The resulting chain of bankruptcies can cause an economic recession as domestic businesses. According to former U. S. Federal Reserve chairman Ben Bernanke, the Great Depression was caused by the Federal Reserve System, and much of the economic damage was caused directly by bank runs. The cost of cleaning up a banking crisis can be huge, with fiscal costs averaging 13% of GDP. Several techniques have been used to try to prevent bank runs or mitigate their effects. S, Federal Deposit Insurance Corporation, and after a run has started, a temporary suspension of withdrawals. These techniques do not always work, for example, even with deposit insurance, Bank runs first appeared as part of cycles of credit expansion and its subsequent contraction. In the 16th century onwards, English goldsmiths issuing promissory notes suffered severe failures due to bad harvests, plummeting parts of the country into famine and unrest. Other examples are the Dutch Tulip manias, the British South Sea Bubble, the French Mississippi Company, the post-Napoleonic depression, Bank runs have also been used to blackmail individuals or governments. In 1832, for example, the British government under the Duke of Wellington overturned a majority government on the orders of the king, William IV, to prevent reform. Wellesleys actions angered reformers, and they threatened a run on the banks under the rallying cry Stop the Duke, many of the recessions in the United States were caused by banking panics. The Great Depression contained several banking crises consisting of runs on multiple banks from 1929 to 1933, in December, New York City experienced massive bank runs that were contained to the many branches of a single bank. Philadelphia was hit a week later by bank runs that affected several banks, but were contained by quick action by the leading city banks. Withdrawals became worse after financial conglomerates in New York and Los Angeles failed in prominently-covered scandals, much of the US Depressions economic damage was caused directly by bank runs, though Canada had no bank runs during this same era due to different banking regulations. Bank runs continued to plague the United States for the several years. City-wide runs hit Boston, Chicago, Toledo, and St. Louis, among others. Institutions put into place during the Depression have prevented runs on U. S. commercial banks since the 1930s, even under such as the U. S. savings
Bank run
–
Depositors clamor to withdraw their savings from a bank in Berlin, 13 July 1931
Bank run
–
The run on the
Montreal City and District Savings Bank. The Mayor addressing the crowd. Printed in 1872 in the
Canadian Illustrated News.
Bank run
–
A poster for the 1896 Broadway
melodrama The War of Wealth depicts a 19th-century bank run in the U.S.
Bank run
–
Bank run during the
Great Depression in the United States, 1933.
14.
Madoff investment scandal
–
The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, Peter has since been sentenced to 10 years in prison, and Mark committed suicide by hanging exactly two years after his fathers arrest. Alerted by his sons, federal authorities arrested Madoff on December 11,2008, on March 12,2009, Madoff pleaded guilty to 11 federal crimes and admitted to operating the largest private Ponzi scheme in history. On June 29,2009, he was sentenced to 150 years in prison with restitution of $170 billion, according to the original federal charges, Madoff said that his firm had liabilities of approximately US$50 billion. Prosecutors estimated the size of the fraud to be $64.8 billion, ignoring opportunity costs and taxes paid on fictitious profits, half of Madoffs direct investors lost no money. Investigators have determined others were involved in the scheme, the U. S. Securities and Exchange Commission has also come under fire for not investigating Madoff more thoroughly, questions about his firm had been raised as early as 1999. Madoffs business, in the process of liquidation, was one of the top market makers on Wall Street and in 2008, lappin Charitable Foundation, the Picower Foundation, and the JEHT Foundation. Madoff started his firm in 1960 as a stock trader with $5,000, earned from working as a lifeguard. His fledgling business began to grow with the assistance of his father-in-law, accountant Saul Alpern, initially, the firm made markets via the National Quotation Bureaus Pink Sheets. To compete with firms that were members of the New York Stock Exchange trading on the exchanges floor. After a trial run, the technology that the firm helped develop became the NASDAQ, at one point, Madoff Securities was the largest buying-and-selling market maker at the NASDAQ. He was active in the National Association of Securities Dealers, a securities industry organization, serving as the Chairman of the Board of Directors. In 1992, The Wall Street Journal described him, one of the masters of the third market. He has built a highly profitable securities firm, Bernard L. Madoff Investment Securities, the $740 million average daily volume of trades executed electronically by the Madoff firm off the exchange equals 9% of the New York exchanges. Mr. Several family members worked for him and his younger brother, Peter, was Senior Managing Director and Chief Compliance Officer, and Peters daughter, Shana Madoff, was the compliance attorney. Madoff’s sons, Mark and Andrew, worked in the section, along with Charles Weiner. Andrew Madoff had invested his own money in his fathers fund, Federal investigators believe the fraud in the investment management division and advisory division may have begun in the 1970s. However, Madoff himself stated his fraudulent activities began in the 1990s, in the 1980s, Madoffs market-maker division traded up to 5% of the total volume made on the New York Stock Exchange
Madoff investment scandal
–
Madoff's
mug shot
Madoff investment scandal
–
Photographers waiting outside the entrance to the apartment block where
Bernard Madoff was under
house arrest.
15.
Global financial crisis of 2008
–
Excessive risk-taking by banks such as Lehman Brothers helped to magnify the financial impact globally. Massive bail-outs of financial institutions and other monetary and fiscal policies were employed to prevent a possible collapse of the worlds financial system. The crisis was followed by a global economic downturn, the Great Recession. The European debt crisis, a crisis in the system of the European countries using the euro. The Dodd–Frank Act, was enacted in the US in the aftermath of the crisis to promote the stability of the United States. The Basel III capital and liquidity standards were adopted by countries around the world, the precipitating factor was a high default rate in the United States subprime home mortgage sector. The expansion of this sector was encouraged by the Community Reinvestment Act, many of these subprime loans were then bundled and sold, finally accruing to quasi-government agencies. The implicit guarantee by the US federal government created a moral hazard, because mortgage lenders could pass these mortgages on in this way, they could and did adopt loose underwriting criteria, and some developed aggressive lending practices. The accumulation and subsequent high rate of these mortgages led to the financial crisis. High mortgage approval rates led to a pool of home-buyers. This appreciation in value led large numbers of homeowners to borrow against their homes as an apparent windfall and this bubble would be burst by a rising Single-Family Residential Mortgages Delinquency Rate. The high delinquency rates led to a devaluation of financial instruments. As the value of these assets plummeted, the market for these securities evaporated, Lehman Brothers filed for bankruptcy on September 15,2008. In spite of trillions paid out by the US federal government, the resulting decrease in buyers caused housing prices to plummet. While the collapse of financial institutions was prevented by the bailout of banks by national governments. In many areas, the market also suffered, resulting in evictions, foreclosures. The bursting of the US housing bubble, which peaked at the end of 2006, caused the values of securities tied to US real estate pricing to plummet, damaging financial institutions globally. Questions regarding bank solvency, declines in credit availability, and damaged investor confidence affected global stock markets, economies worldwide slowed during this period, as credit tightened and international trade declined
Global financial crisis of 2008
–
Share in GDP of U.S. financial sector since 1860
Global financial crisis of 2008
–
The
TED spread (in red) increased significantly during the financial crisis, reflecting an increase in perceived
credit risk.
Global financial crisis of 2008
–
Diagram of CMLTI 2006 – NC2
Global financial crisis of 2008
–
A protester on
Wall Street in the wake of the
AIG bonus payments controversy is interviewed by news media.
16.
Pyramid scheme
–
As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit, as such, pyramid schemes are unsustainable and often illegal. Pyramid schemes have existed for at least a century in different guises, some multi-level marketing plans have been classified as pyramid schemes. In a pyramid scheme, an organization compels individuals who wish to join to make a payment, in exchange, the organization promises its new members a share of the money taken from every additional member that they recruit. The directors of the organization receive a share of these payments. Such organizations seldom involve sales of products or services with value, without creating any goods or services, the only revenue streams for the scheme are recruiting more members, or soliciting more money from current members. The behavior of pyramid schemes follows the mathematics concerning exponential growth quite closely, each level of the pyramid is much larger than the one before it. For a pyramid scheme to make money for everyone who enrolls in it, it would have to expand indefinitely and this is not possible because the population of Earth is finite. When the scheme inevitably runs out of new recruits, lacking other sources of revenue, because in a geometric series, the biggest terms are at the end, most people will be in the lower levels of the pyramid. In a pyramid scheme, people in the upper layers typically profit while people in the lower layers typically lose money, since at any given time, most of the members in the scheme are at the bottom, most participants in a pyramid scheme will not make any money. In particular, when the scheme collapses, most members will be in the layers and thus will not have any opportunity to profit from the scheme. Therefore, a scheme is characterized by a few people making large amounts of money. For this reason, they are considered scams, many pyramids are more sophisticated than the simple model. These recognize that recruiting a number of others into a scheme can be difficult so a seemingly simpler model is used. In this model each person must recruit two others, but the ease of achieving this is offset because the required to recoup any money also increases. The scheme requires a person to two others, who must each recruit two others, and so on. Prior instances of this scheme have been called the Airplane Game and the four tiers labelled as captain, co-pilot, crew, another instance was called the Original Dinner Party which labeled the tiers as dessert, main course, side salad, and appetizer. A person on the course is the one at the top of the tree. Another variant, Treasure Traders, variously used gemology terms such as polishers, stone cutters, such schemes may try to downplay their pyramid nature by referring to themselves as gifting circles with money being gifted
Pyramid scheme
–
The unsustainable exponential progression of a classic pyramid scheme
17.
Ethereum
–
Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract functionality. It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine, Ethereum also provides a value token called ether, which can be transferred between participants and is used to compensate participant nodes for computations performed. Gas, an internal transaction pricing mechanism, is used to prevent spam on the network, Ethereum was initially proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Development was funded by an online crowdsale during July–August 2014, the system went live on 30 July 2015. Ethereum was initially described in a paper by Vitalik Buterin. More specifically, Buterin had argued to the core developers that the platform needed a more robust scripting language for developing applications. Failing to gain agreement, he proposed development of a new platform with a more general scripting language, Buterin believes that many applications could benefit from Bitcoin-like software. The Ethereum software project was developed in early 2014 by a Swiss company. Subsequently, a Swiss non-profit foundation, the Ethereum Foundation was set up as well, development was funded by an online public crowdsale during July–August 2014, with the participants buying the Ethereum value token with another digital currency, bitcoin. While there was praise for the technical innovations of Ethereum. Ethereums live blockchain was launched on 30 July 2015, the initial version of Ethereum—called Frontier—uses a proof of work consensus algorithm, although a later version is expected to replace that with a proof of stake algorithm. Since the initial version, the Ethereum network has accomplished several so-called hard forks, first hard fork The first hard fork introduced a difficulty bomb to incentivize an upgrade to proof of stake when this system will be ready. Second hard fork—Homestead release The second hard fork was made in Spring 2016 and marked the first stable release, as a consequence of the way the DAO was programmed, these moved funds would remain unavailable for withdrawal for about a month. After a few weeks discussion, on 20 July 2016 Ethereum hard-forked creating a new fork to reverse the hack and return The DAO funds and this was the first time any mainstream blockchain was forked to reverse a transaction in order to make reparations to investors in a failed enterprise. After The DAO fork, Ethereum and Ethereum Classic have both subsequently forked multiple times to deal with other attacks, fourth hard fork—de-bloating & DDoS protection Towards the end of November 2016, a fourth hard fork took place. This hard fork successfully de-bloated the blockchain and attempted to prevent further attacks by hackers. The value token of the Ethereum blockchain is called ether and it is listed under the diminutive ETH and traded on cryptocurrency exchanges. It is also used to pay for fees and computational services on the Ethereum network
Ethereum
–
Group photo from DEVCON-0, Berlin, 14 November 2014.
Ethereum
–
Ethereum Software
18.
Financial Times
–
The Financial Times is an English-language international daily newspaper with a special emphasis on business and economic news. The paper, published and owned by Nikkei Inc. in Tokyo, was founded in 1888 by James Sheridan and Horatio Bottomley, and merged in 1945 with its closest rival, the Financial Times has an average daily readership of 2.2 million people worldwide. FT. com has 4.5 million registered users and over 285,000 digital subscribers, FT Chinese has more than 1.7 million registered users. The world editions of the Financial Times newspaper had an average daily circulation of 234,193 copies in January 2014. In February 2014 the combined sale of the editions of the Financial Times was 224,000 copies. In October 2013 the combined print and digital circulation of the Financial Times reached nearly 629,000 copies. In December 2016 print sales for the paper stood at 193,211, on 23 July 2015 Nikkei Inc. agreed to buy the Financial Times from Pearson for £844m. On 30 November 2015 Nikkei completed the acquisition, the FT was launched as the London Financial Guide on 10 January 1888, renaming itself the Financial Times on 13 February the same year. Describing itself as the friend of The Honest Financier, the Bona Fide Investor, the Respectable Broker, the Genuine Director, the readership was the financial community of the City of London, its only rival being the slightly older and more daring Financial News. After 57 years of rivalry the Financial Times and the Financial News were merged in 1945 by Brendan Bracken to form a single six-page newspaper, the Financial Times brought a higher circulation while the Financial News provided much of the editorial talent. The Lex column was introduced from Financial News. Pearson bought the paper in 1957, over the years the paper grew in size, readership and breadth of coverage. It established correspondents in cities around the world, reflecting early moves in the economy towards globalisation. On 1 January 1979 the first FT was printed outside the UK, since then, with increased international coverage, the FT has become a global newspaper, printed in 22 locations with five international editions to serve the UK, continental Europe, the U. S. The European edition is distributed in continental Europe and Africa and it is printed Monday to Saturday at five centres across Europe reporting on matters concerning the European Union, the Euro and European corporate affairs. In 1994 FT launched a lifestyle magazine, How To Spend It. In 2009 it launched a website for the magazine. On 13 May 1995 the Financial Times group made its first foray into the world with the launch of FT. com
Financial Times
–
The front page of the Financial Times on 13 February 1888.
Financial Times
–
The front page of the Financial Times on 29 December 2010
Financial Times
–
The London offices of the Financial Times at One Southwark Bridge (2013).
Financial Times
–
Editor Lionel Barber speaking at the newspaper's 125th anniversary party in
London, 2013
19.
Economic bubble
–
An economic bubble or asset bubble is trade in an asset at a price or price range that strongly deviates from the corresponding assets intrinsic value. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future, Asset bubbles date back as far as the 1600s and are now widely regarded as a recurrent feature of modern economic history. Because it is difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect. Such a drop is known as a crash or a bubble burst, prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone. While some economists deny that bubbles occur, the cause of bubbles remains disputed by those who are convinced that asset prices often deviate strongly from intrinsic values. Many explanations have suggested, and research has recently shown that bubbles may appear even without uncertainty, speculation. In such cases, the bubbles may be argued to be rational and these approaches require that the timing of the bubble collapse can only be forecast probabilistically and the bubble process is often modelled using a Markov switching model. Similar explanations suggest that bubbles might ultimately be caused by processes of price coordination, more recent theories of asset bubble formation suggest that these events are sociologically driven. For instance, explanations have focused on emerging social norms and the role that culturally-situated stories or narratives play in these events and this was one of the earliest modern financial crises, other episodes were referred to as manias, as in the Dutch tulip mania. The metaphor indicated that the prices of the stock were inflated and fragile – expanded based on nothing but air, and vulnerable to a sudden burst, as in fact occurred. The impact of economic bubbles is debated within and between schools of thought, they are not generally considered beneficial, but its debated how harmful their formation. Political economist Robert E. Wright argues that bubbles can be identified before the fact with high confidence. A protracted period of low risk premiums can simply prolong the downturn in asset price deflation as was the case of the Great Depression in the 1930s for much of the world and the 1990s for Japan. Not only can the aftermath of a crash devastate the economy of a nation, another important aspect of economic bubbles is their impact on spending habits. Market participants with overvalued assets tend to spend more because they feel richer, many observers quote the housing market in the United Kingdom, Australia, New Zealand, Spain and parts of the United States in recent times, as an example of this effect. In an economy with a bank, the bank may therefore attempt to keep an eye on asset price appreciation. This is usually done by increasing the interest rate, in the 1970s, excess monetary expansion after the U. S. came off the gold standard created massive commodities bubbles. These bubbles only ended when the U. S, central Bank finally reined in the excess money, raising federal funds interest rates to over 14%
Economic bubble
–
A card from the
South Sea Bubble
20.
Stock bubble
–
A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation. Behavioral finance theory attributes stock market bubbles to cognitive biases that lead to groupthink, bubbles occur not only in real-world markets, with their inherent uncertainty and noise, but also in highly predictable experimental markets. Other theoretical explanations of stock market bubbles have suggested that they are rational, intrinsic, two famous early stock market bubbles were the Mississippi Scheme in France and the South Sea bubble in England. Both bubbles came to an end in 1720, bankrupting thousands of unfortunate investors. Those stories, and many others, are recounted in Charles Mackays 1841 popular account, Extraordinary Popular Delusions, the 1920s saw the widespread introduction of an amazing range of technological innovations including radio, automobiles, aviation and the deployment of electrical power grids. The 1990s was the decade when Internet and e-commerce technologies emerged, stock market bubbles frequently produce hot markets in initial public offerings, since investment bankers and their clients see opportunities to float new stock issues at inflated prices. These hot IPO markets misallocate investment funds to areas dictated by speculative trends, emotional and cognitive biases seem to be the causes of bubbles, but often, when the phenomenon appears, pundits try to find a rationale, so as not to be against the crowd. Thus, sometimes, people will dismiss concerns about overpriced markets by citing a new economy where the old stock valuation rules may no longer apply and this type of thinking helps to further propagate the bubble whereby everyone is investing with the intent of finding a greater fool. Still, some cite the wisdom of crowds and say that price movements really do reflect rational expectations of fundamental returns. Large traders become powerful enough to rock the boat, generating stock market bubbles, the bubble in closed-end country funds in the late 1980s is instructive here, as are the bubbles that occur in experimental asset markets. According to the hypothesis, this doesnt happen, and so any data is wrong. For closed-end country funds, observers can compare the prices to the net asset value per share. For experimental asset markets, observers can compare the prices to the expected returns from holding the stock. In both instances, closed-end country funds and experimental markets, stock prices clearly diverge from fundamental values. Nobel laureate Dr. Vernon Smith has illustrated the closed-end country fund phenomenon with a chart showing prices, at its peak, the Spain Fund traded near $35, nearly triple its Net Asset Value of about $12 per share. It only took a few months for the premiums in closed-end country funds to back to the more typical discounts at which closed-end funds trade. Those who had them at premiums had run out of greater fools. For a while, though, the supply of greater fools had been outstanding, a rising price on any share will attract the attention of investors
Stock bubble
–
The
NASDAQ Composite index spiked in the late 90s and then fell sharply as a result of the
dot-com bubble.
21.
Real estate bubble
–
A real estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, typically following a land boom. A land boom is the increase in the market price of real property such as housing until they reach unsustainable levels. The financial crisis of 2007–08 was related to the bursting of real estate bubbles which had begun during the 2000s around the world, Bubbles in housing markets are more critical than stock market bubbles. Historically, equity price busts occur on average every 13 years, lasts for 2.5 years, Housing price busts are less frequent, but last nearly twice as long and lead to output losses that are twice as large. A recent laboratory experimental study also shows that, compared to financial markets, real estate markets involve longer boom, as with all types of economic bubbles, disagreement exists over whether or not a real estate bubble can be identified or predicted, then perhaps prevented. Speculative bubbles are persistent, systematic and increasing deviations of actual prices from their fundamental values, Bubbles can often be hard to identify, even after the fact, due to difficulty in accurately estimating intrinsic values. In real estate, fundamentals can be estimated from rental yields or based on a regression of actual prices on a set of demand and/or supply variables. Some argue further that governments and central banks can and should take action to prevent bubbles from forming, within mainstream economics, economic bubbles, and in particular real estate bubbles, are not considered major concerns. Within some schools of economics, by contrast, real estate bubbles are considered of critical importance. The pre-dominating economic perspective is that economic bubbles result in a temporary boost in wealth, when prices increase, there is a positive wealth effect, and when they decline, there is a negative wealth effect. These effects can be smoothed by counter-cyclical monetary and fiscal policies, the ultimate effect on owners who bought before the bubble formed and did not sell is zero. Those who bought low and sold high profited, whereas those who bought high. This redistribution of wealth is of little macroeconomic significance and these are then argued to cause financial and hence economic crises. This is first argued empirically – numerous real estate bubbles have been followed by economic slumps, when the bubble bursts, the value of the property decreases but not the level of debt. The burden of repaying or defaulting on the loan depresses aggregate demand, it is argued, the crash of the Japanese asset price bubble from 1990 on has been very damaging to the Japanese economy. The crash in 2005 affected Shanghai, Chinas largest city, in comparison to the stock market bubbles, real estate bubbles take longer to deflate, prices decline slower because the real estate market is less liquid. Therefore, this focuses on housing bubbles and mentions other sectors only when their situation differs. Then U. S. Federal Reserve Chairman Alan Greenspan said in mid-2005 that at a minimum, the Economist magazine, writing at the same time, went further, saying the worldwide rise in house prices is the biggest bubble in history
Real estate bubble
–
US house price trend (1998–2008) as measured by the
Case-Shiller index
Real estate bubble
–
Ratio of Melbourne median house prices to Australian annual wages, 1965 to 2010
Real estate bubble
–
Inflation-adjusted home prices in
Japan (1980–2005) compared to home price appreciation in the
United States,
Britain, and
Australia (1995–2005).
22.
Tulip mania
–
Tulip mania or tulipomania was a period in the Dutch Golden Age during which contract prices for bulbs of the recently introduced tulip reached extraordinarily high levels and then suddenly collapsed. At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the income of a skilled craftsman. The term tulip mania is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values, the 1637 event was popularized in 1841 by the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay. According to Mackay, at one point 12 acres of land were offered for a Semper Augustus bulb, Mackay claims that many such investors were ruined by the fall in prices, and Dutch commerce suffered a severe shock. Although Mackays book is a classic, his account is contested, many modern scholars feel that the mania was not as extraordinary as Mackay described and argue that not enough price data are available to prove that a tulip bulb bubble actually occurred. Research is difficult because of the economic data from the 1630s—much of which come from biased. Some modern economists have proposed rational explanations, rather than a speculative mania, for the rise, for example, other flowers, such as the hyacinth, also had high initial prices at the time of their introduction, which immediately fell. The high asset prices may also have driven by expectations of a parliamentary decree that contracts could be voided for a small cost—thus lowering the risk to buyers. Tulip bulbs were soon distributed from Vienna to Augsburg, Antwerp and he planted his collection of tulip bulbs and found they were able to tolerate the harsher conditions of the Low Countries, shortly thereafter the tulip began to grow in popularity. The tulip was different from other flower known to Europe at that time. The appearance of the tulip as a status symbol at this time coincides with the rise of newly independent Hollands trade fortunes. No longer the Spanish Netherlands, its resources could now be channeled into commerce. Amsterdam merchants were at the center of the lucrative East Indies trade, as a result, tulips rapidly became a coveted luxury item, and a profusion of varieties followed. They were classified in groups, the tulips of red, yellow, or white were known as Couleren, the multicolored Rosen, Violetten, and the rarest of all. The multicolor effects of intricate lines and flame-like streaks on the petals were vivid and spectacular, growers named their new varieties with exalted titles. Many early forms were prefixed Admirael, often combined with the growers names, generael was another prefix used for around thirty varieties. Later varieties were given even more extravagant names, derived from Alexander the Great or Scipio, or even Admiral of Admirals, however, naming could be haphazard and varieties highly variable in quality. Most of these varieties have now died out, tulips grow from bulbs, and can be propagated through both seeds and buds
Tulip mania
–
A tulip, known as "the Viceroy" (viseroij), displayed in the 1637 Dutch catalog 'Verzameling van een Meenigte Tulipaanen'. Its bulb cost between 3,000 and 4,200
guilders (florins) depending on size (aase). A skilled craftsman at the time earned about 300 guilders a year.
Tulip mania
–
A Satire of Tulip Mania by
Jan Brueghel the Younger (ca. 1640) depicts speculators as brainless monkeys in contemporary upper-class dress. In a commentary on the economic folly, one monkey urinates on the previously valuable plants, others appear in debtor's court and one is carried to the grave.
Tulip mania
–
Anonymous 17th-century
watercolor of the Semper augustus, famous for being the most expensive tulip sold during tulip mania.
Tulip mania
–
Wagon of Fools by
Hendrik Gerritsz Pot, 1637. Followed by Haarlem weavers who have abandoned their looms, blown by the wind and flying a flag emblazoned with tulips,
Flora, goddess of flowers, her arms laden with tulips, rides to destroy the sea along with tipplers, money changers and the two-faced goddess Fortuna.
23.
Pump and dump
–
Once the operators of the scheme dump sell their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump and dump schemes are sometimes called chop stocks, while fraudsters in the past relied on cold calls, the Internet now offers a cheaper and easier way of reaching large numbers of potential investors. Pump and dump schemes may take place on the Internet using an e-mail spam campaign, through media channels via a press release. Often the stock promoter will claim to have information about impending news. Newsletters may purport to offer unbiased recommendations, then tout a company as a hot stock, promoters may also post messages in chat rooms or stock message boards such as ADVFN, urging readers to buy the stock quickly. If a promoters campaign to pump a stock is successful, it will entice unwitting investors to purchase shares of the target company, the increased demand, price, and trading volume of the stock may convince more people to believe the hype, and to buy shares as well. The same principle applies in the United Kingdom, where companies are typically small companies on the AIM or OFEX. A more modern spin on this attack is known as hack, in this form, a person purchases penny stocks and then uses compromised brokerage accounts to purchase large quantities of that stock. The net result is an increase, which is often pushed further by day traders seeing a quick advance in a stock. The original stockholder then cashes out at a premium, Lebed bought penny stocks and then promoted them on message boards, pointing at the price increase. When other investors bought the stock, Lebed sold his for a profit and he came to the attention of the U. S. Securities and Exchange Commission, which filed a civil suit against him alleging security manipulation. Lebed settled the charges by paying a fraction of his total gains and he neither admitted nor denied wrongdoing, but promised not to manipulate securities in the future. After Enron falsely reported profits which inflated the price, they covered the real numbers by using questionable accounting practices. 29 Enron executives sold overvalued stock for more than a billion dollars before the company went bankrupt, SEC brought charges against Park Financial Group as a result of an investigation into a pump and dump scheme during 2002-2003 of the Pink Sheet listed stock of Spear & Jackson Inc. Started as Crown Corporation, Langbar was the biggest pump and dump fraud on the Alternative Investment Market, the company was at one point valued greater than $1 billion, based on supposed bank deposits in Brazil which did not exist. None of the conspirators were convicted, although their whereabouts are known. A patsy who made a negligent false statement about the assets was convicted and banned from being a director, the investors who lost as much as £100 million sued one of the fraudsters and recovered £30 million. Pump and dump stock scams are prevalent in spam, accounting for about 15% of spam e-mail messages, a study by Böhme and Holz shows a similar effect
Pump and dump
–
The "night singer of shares" sold stock on the streets during the
South Sea Bubble. Amsterdam, 1720.
24.
Bad faith
–
Bad faith is double mindedness or double heartedness in duplicity, fraud, or deception. It may involve intentional deceit of others, or self-deception, the expression bad faith is associated with double heartedness, which is also translated as double mindedness. A bad faith belief may be formed through self-deception, being double minded, bad faith may be viewed in some cases to not involve deception, as in some kinds of hypochondria with actual physical manifestations. People may hold beliefs in their minds even though they are directly contradicted by facts and these are beliefs held in bad faith. But there is debate as to whether this self-deception is intentional or not, in his book Being and Nothingness, the philosopher Jean-Paul Sartre defined bad faith as hiding the truth from oneself. The fundamental question about bad faith self-deception is how it is possible, in order for a liar to successfully lie to the victim of the lie, the liar must know that what is being said is false. In order to be successful at lying, the victim must believe the lie to be true, when a person is in bad faith self-deception, the person is both the liar and the victim of the lie. So at the time the liar, as liar, believes the lie to be false. So there is a contradiction in that a person in bad faith self-deception believes something to be true, various commentators and translators have discussed being of two beliefs or faiths in being double hearted or double minded. Websters Dictionary equates bad faith with being of two hearts, the Hebrew Bible and the New Testament Epistles admonish religious believers not to be double minded. In Psalms 119,113, one translation is I hate double-minded men, the New Living Translation emphasises divided loyalty translating the passage as I hate those with divided loyalties, but I love your instructions. The Epistle of James warns against trusting a person that perpetually disagrees with himself and it is not a hypocrite that is meant, but a fickle, wavering man, as the context shows. Alfords translation of the Bible uses the ancient Greek literatures waverer to express double minded, in James 1,8, it denotes instability of a cognitive attitude, he is a double-minded man, unstable in attitude. In the Gods Word Translation, a person who has doubts is thinking about two different things at the time and cant make up his mind about anything. Youngs Literal Translation translates this as being two souled, in Clarkes Commentary on the Bible, a double-minded man is one of two souls in that one is for earth, and the other for heaven, wishing to secure both worlds at once. Gills exposition of the Bible refers to asking for one thing and meaning another, honoring in word but not in heart, such persons could make no progress in Divine things. The Catholic Church does not consider everyone with heretical views to have bad faith, for example, people who seek the truth. The true desires of the subconscious express themselves as wish fulfillment in dreams, bad faith wish fulfillment is central to the ethics of belief, which discusses questions at the intersection of epistemology, philosophy of mind, psychology, Freudian psychoanalysis, and ethics
Bad faith
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Jean-Paul Sartre and Simone de Beauvoir developed ideas about bad faith into existentialism
Bad faith
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U.S. Secretary of State John Foster Dulles used an "inherent bad faith" model when negotiating with the Soviet Union in International relations.
25.
Black Friday (1869)
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The Black Friday, September 24,1869, gold panic was caused by the efforts of two speculators, Jay Gould and his partner James Fisk, to corner the gold market on the New York Gold Exchange. The scandal took place during the Presidency of Ulysses S. Grant whose policy was to sell weekly Treasury gold to pay off the debt, stabilize the dollar. The country had gone through tremendous upheaval during the Civil War and was not yet fully restored and this period, known as the Gilded Age, was a time of great industrial growth which invited much investment and speculation. Gould and Fisk used their personal appearances with Grant to gain clout on Wall Street, at the same time, Gould and Fisk began buying gold at Goulds New York Gold Room raising the price of gold. A panic on Wall Street ensued and the country went through a few months of economic turmoil, thanks to the efforts of Grant, members of his administration and others a national depression was averted. Gould and Fisk, having hired the best defense, and favored by Tweed Ring judges, an 1870 government investigation, headed by James A. Garfield, exonerated Grant of any illicit involvement in the conspiracy. It was generally believed that the U. S. Government would ultimately redeem the greenbacks with gold, Grant believed that putting sound money back into circulation was the best approach to restoring the economy. Grant put in charge of the U. S. Treasury the talented George S. Boutwell whose primary task was to reduce the national debt, to accomplish this Boutwell, in April, ordered his assistant treasurer to sell gold from the Treasury and buy up wartime bonds. He also initiated reforms in the Treasury Department by improving methods of tax collecting and attacking the problem of counterfeiting, by the end of May the national debt had been reduced by $12 million. Boutwells treasury policy of reducing the national debt kept the supply level. The purpose of Grants fiscal policy was to reduce the amount of greenbacks in the economy, Gould bribed Butterfield with a $10,000 check, more than Butterfields annual salary of $8,000. Butterfield agreed to tip the men off when the government intended to sell gold, Gould and Fisk then recruited Grants brother-in-law, a financier named Abel Corbin who had married Grants younger sister Jennie. Corbin was considered a smooth talker and had made money speculating in real estate and they used Corbins relationship to get close to Grant in social situations, where they would argue against government sale of gold, and Corbin would support their arguments. Not accustomed to having such offers turned down, Gould went ahead and made the purchase, when Porter was informed of Goulds unauthorized transaction he refused the offer in writing. In similar fashion Corbin approached Grants wife Julia and attempted to entice her into accepting half interest in $250,000 in bonds, but she turned that offer down. Gould secured owning interest in the federally audited New Yorks Tenth National Bank, in addition to meeting at Corbins mansion home, Fisk and Gould also talked with Grant on their Erie Canal railroad car and in Fisks box seats at New Yorks Fifth Avenue Theatre. When Gould planted an idea in Grant that if gold prices increased, it would lower the dollar, both Grant and Boutwell strongly felt that the nations war time debt had to be paid to assure the credibility of the United States in the eyes of the European banks. To accomplish this Boutwell began selling gold from the Treasurys reserve of $100 million specie, without the Presidents consent, Boutwells controversial approach was endorsed by Grant, giving Boutwell all the latitude he needed
Black Friday (1869)
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Photograph of the black board in the New York Gold Room, September 24, 1869, showing the collapse of the price of gold. Handwritten caption by
James A. Garfield indicates it was used as evidence before the Committee of Banking & Currency during hearings in 1870.
26.
Bucket shop (stock market)
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As defined by the U. S. there being no transfer or delivery of the stock or commodities nominally dealt in. People often mistakenly interchange the words bucket shop and boiler room, a boiler room has been defined as a place where high-pressure salespeople use banks of telephones to call lists of potential investors in order to peddle speculative, even fraudulent, securities. However, with a shop, it could be better thought of as a place where people go to make side bets – similar to a bookie. Bucket shop is a term under the criminal law of many states in the United States that make it a crime to operate a bucket shop. The transaction goes in the bucket and is never executed, because no trading of actual securities occurs, the customer is essentially betting against the bucket shop operator in a game based on abstract security prices. The bucket shops exchange is a fiction, which the parties agree to imagine as following the events occurring in a real exchange, alternatively, the bucket shop operator literally plays the bank, as in a gambling house, against the customer. Bucketing of orders violates several provisions of U. S. securities law and these prohibitions apply to legitimate brokerages as well as bucket shops. A person who engages in the practice is referred to as a bucketeer, bucket shops specializing in stocks and commodity futures appeared in the United States in the 1870s, corresponding to the innovation of stock tickers upon which they depended. In 1889, the New York Stock Exchange addressed the ticker trouble and this embargo instead proved a severe hindrance to the Exchanges wealthy local clients, as well as the Exchanges brokers in other cities across the country. It also had the effect of favoring competing exchanges, and was abandoned within days. Edwin Lefèvre, who is believed to have writing on behalf of Jesse Lauriston Livermore. In the United States, the traditional pseudo-brokerage bucket shops came under increasing legal assault in the early 1900s, however, the term came to apply to other types of scams, some of which are still practiced. They were typically small store front operations that catered to the small investor, however, no actual shares were bought or sold, all trading was between the bucket shop and its clients. The bucket shop made its profit from commissions, and also profited when share prices went against the client, the terms of trade were different for each bucket shop, but bucket shops typically catered to customers who traded on thin margins, even as low as 1%. Most bucket shops refused to make calls, so that if the stock price fell even momentarily to the limit of the clients margin. The highly leveraged use of margins theoretically gave the speculators equally large upside potential and they were made illegal after they were cited as a major contributor to the two stock market crashes in the early 1900s. The activity flourished until outlawed in the 1920s, the origin of the term bucket shop has nothing to do with financial markets, as the term originated from England in the 1820s. During the 1820s, street urchins drained beer kegs which were discarded from public houses, the street urchins would take the dregs to an abandoned shop and drink them
Bucket shop (stock market)
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A scene from a bucket shop in 1892.
27.
White-collar crime
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White-collar crime refers to financially motivated nonviolent crime committed by business and government professionals. Within criminology, it was first defined by sociologist Edwin Sutherland in 1939 as a crime committed by a person of respectability and high social status in the course of his occupation. Some crime is only possible because of the identity of the offender, Shover and Wright point to the essential neutrality of a crime as enacted in a statute. It almost inevitably describes conduct in the abstract, not by reference to the character of the persons performing it, thus, the only way that one crime differs from another is in the backgrounds and characteristics of its perpetrators. By organizational culture rather than the offender or offense which overlaps with organized crime, organizational or corporate crime which occurs when corporate executives commit criminal acts to benefit their company by overcharging or price fixing, false advertising, etc. The types of crime committed are a function of what is available to the potential offender, blue-collar crime tends to be more obvious and thus attracts more active police attention such as vandalism or shoplifting. In contrast, white-collar employees can incorporate legitimate and criminal behavior and it is estimated that a great deal of white-collar crime is undetected or, if detected, it is not reported. Corporate crime deals with the company as a whole, the crime benefits the investors or the individuals who are in high positions in the company or corporation. The relationship white-collar crime has with corporate crime is that they are similar because both are involved within the business world. Their difference is that white-collar crime benefits the individual involved, one well-known insider trading case in the United States is the ImClone stock trading case. In December 2001, top-level executives sold their shares in ImClone Systems, the SEC reached a settlement in 2005. Although law enforcement claims to have prioritized white-collar crime, evidence shows that it continues to be a low priority, when senior levels of a corporation engage in criminal activity using the company this is sometimes called control fraud. Some examples include human trafficking, money laundering, drug smuggling, illegal arms dealing, terrorism, the two most common forms are theft and fraud. Theft can be of varying degrees, from a pencil to furnishings to a car, insider trading, the trading of stock by someone with access to publicly unavailable information, is a type of fraud. In the modern world, there are a lot of nations which divide the crimes into some laws, crimes Related to Inducement of Foreign Aggression is the crime of communicating with aliens secretly to cause foreign aggression or menace. Crimes Related to Foreign Aggression is the treason of cooperating with foreign aggression positively regardless of the national inside and outside, crimes Related to Insurrection is the internal treason. Depending on a country, conspiracy is added to these, in the United States, sentences for white-collar crimes may include a combination of imprisonment, fines, restitution, community service, disgorgement, probation, or other alternative punishment. In other countries, such as China, white-collar criminals can be given the death penalty, certain countries like Canada consider the relationship between the parties to be a significant feature on sentence when there is a breach of trust component involved
White-collar crime
–
Criminology and
penology
28.
Hustle (TV series)
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Hustle is a British television drama series made by Kudos Film and Television and broadcast on BBC One in the United Kingdom. The eighth and last series ended on 17 February 2012, Hustle was largely born from the same production team that created and popularised the early series of Spooks, a similarly-styled drama series first broadcast in 2002. Bharat Nalluri, that series Executive Director, conceived the idea in early 2002 while filming for the first Spooks series was ongoing, intrigued by the idea, Featherstone recruited Tony Jordan, the lead scriptwriter of the soap opera EastEnders, to develop it into a workable proposal. Jordan quickly produced some initial script drafts, which Featherstone took to the BBC, Gareth Neame, Head of Drama Commissioning, Featherstone assembled a production team that had considerable overlap with the Spooks crew, including Simon Crawford Collins as producer and Matthew Graham as co-writer. In creating the first episodes, Jordan drew inspiration from the tradition of confidence tricks and heists in Hollywood and television, including The A-Team, The Sting. With Hustle greenlit for filming, the team began searching for actors to play both the main characters and the marks for each episode. The process was quite difficult, Crawford described his immediate thought this is so good. Tony had created incredibly strong characters, each with their own style and panache. Robert Vaughn, the Academy Award-nominated star of The Man from U. N. C. L. E. was soon suggested as a choice to play Albert Stroller. After meeting Vaughn over lunch, Crawford straight away that he could bring a new dimension to the part of Albert. Vaughn was immediately offered the role, and asked to begin filming the following day, jordans script called for a group of five con artists or grifters, with a wide range of ages, appearances and experience. Although having numerous credits in film and on the stage, Lester was a face in television. Lester explained that he couldnt imagine playing the character for years. In the very first rehearsal we were doing a routine and then the next thing I know Im whacking out several different accents and I just thought, Im in heaven. Jaime Murray completed the lead actors, playing Stacie Monroe who, so when I watched some of it on tape I was totally amazed that you couldnt see how frightened I really was. I kept thinking, Oh my God, Im working with Adrian Lester and Robert Vaughn. Any time now someone is going to tap me on the shoulder and ask me to get my coat. In addition to the actors, the production team recruited a number of actors, both major and minor, to play the marks in each episode, including David Haig, Tamzin Outhwaite
Hustle (TV series)
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Title card from series 5 to series 8
Hustle (TV series)
–
The main cast of Hustle (series 5–8)
Hustle (TV series)
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The main cast of Hustle (series 4)
29.
United States Postal Inspection Service
–
The United States Postal Inspection Service is the law enforcement arm of the United States Postal Service. Its jurisdiction is defined as crimes that may affect or fraudulently use the U. S. Mail. In fiscal year 2014, USPIS had 2,376 field employees, in 2008, the U. S. Postal Inspection Service had 2,288 full-time personnel with the authority to make arrests and carry firearms on duty. This represented a 23. 1% drop over the five years. The Postal Inspection Service has the oldest origins of any law enforcement agency in the United States. It traces its roots back to 1772 when colonial Postmaster General Benjamin Franklin first appointed a surveyor to regulate, thus, the Services origins—in part—predate the Declaration of Independence, and therefore the United States itself. As Franklin was Postmaster under the Continental Congress and was George Washingtons first Postmaster, in 1801, the title of surveyor was changed to Special Agent. In 1830, the Special Agents were organized into the Office of Instructions, the Postal Inspection Service was the first federal law enforcement agency to use the title Special Agent for its officers. Congress changed this title to Inspector in 1880, for some time, one of their primary duties was the enforcement of obscenity prohibitions under the Comstock Act. As fact-finding and investigative agents, Postal Inspectors are sworn law enforcement officers who carry firearms, make arrests and serve federal search warrants. Inspectors work closely with U. S. Attorneys, other law enforcement agencies, the USPIS has responsibility to safeguard over 600,000 Postal Service employees and billions of pieces of mail transported worldwide yearly by air, land, rail and sea. The USPS OIG conducts independent audits and investigations, Audits of postal programs and operations help to determine whether the programs and operations are efficient and cost-effective. Investigations help prevent and detect fraud, waste, and misconduct and have a deterrent effect on postal crimes, the OIG primarily took over the Postal Inspection Services audit function, as well as fraud waste and abuse. Since the September 11,2001, attacks, the USPIS has also investigated several cases where ricin, anthrax, mcGee is credited with assisting in the conviction of former Illinois Governor Otto Kerner on mail fraud charges. This function also investigates robberies of postal employees and postal facilities, burglaries of postal facilities and this investigative function focuses on ensuring that the sanctity and trust in the U. S. The laundering of narcotics and other criminal proceeds through the use of Postal Money Orders is sometimes categorized under this investigative function, security Audits are conducted by these teams to ensure that postal service maintains facilities secure from not only theft and robberies but also natural and manmade disasters. USPIS maintains investigators in the US and in posts around the world for protection, liaison, joint Task Force Investigations, USPIS participates in joint task force investigations where laws applicable to the mail service are involved. These cases are often wide ranging and involve every law enforcement agency of the Federal Government, the U. S. Postal Inspection Service first established a crime lab in 1940
United States Postal Inspection Service
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Patch of the United States Postal Inspection Service Postal police uniform division
United States Postal Inspection Service
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Badge of the United States Postal Inspection Service
United States Postal Inspection Service
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Public service announcement poster of USPIS
30.
International Standard Book Number
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The International Standard Book Number is a unique numeric commercial book identifier. An ISBN is assigned to each edition and variation of a book, for example, an e-book, a paperback and a hardcover edition of the same book would each have a different ISBN. The ISBN is 13 digits long if assigned on or after 1 January 2007, the method of assigning an ISBN is nation-based and varies from country to country, often depending on how large the publishing industry is within a country. The initial ISBN configuration of recognition was generated in 1967 based upon the 9-digit Standard Book Numbering created in 1966, the 10-digit ISBN format was developed by the International Organization for Standardization and was published in 1970 as international standard ISO2108. Occasionally, a book may appear without a printed ISBN if it is printed privately or the author does not follow the usual ISBN procedure, however, this can be rectified later. Another identifier, the International Standard Serial Number, identifies periodical publications such as magazines, the ISBN configuration of recognition was generated in 1967 in the United Kingdom by David Whitaker and in 1968 in the US by Emery Koltay. The 10-digit ISBN format was developed by the International Organization for Standardization and was published in 1970 as international standard ISO2108, the United Kingdom continued to use the 9-digit SBN code until 1974. The ISO on-line facility only refers back to 1978, an SBN may be converted to an ISBN by prefixing the digit 0. For example, the edition of Mr. J. G. Reeder Returns, published by Hodder in 1965, has SBN340013818 -340 indicating the publisher,01381 their serial number. This can be converted to ISBN 0-340-01381-8, the check digit does not need to be re-calculated, since 1 January 2007, ISBNs have contained 13 digits, a format that is compatible with Bookland European Article Number EAN-13s. An ISBN is assigned to each edition and variation of a book, for example, an ebook, a paperback, and a hardcover edition of the same book would each have a different ISBN. The ISBN is 13 digits long if assigned on or after 1 January 2007, a 13-digit ISBN can be separated into its parts, and when this is done it is customary to separate the parts with hyphens or spaces. Separating the parts of a 10-digit ISBN is also done with either hyphens or spaces, figuring out how to correctly separate a given ISBN number is complicated, because most of the parts do not use a fixed number of digits. ISBN issuance is country-specific, in that ISBNs are issued by the ISBN registration agency that is responsible for country or territory regardless of the publication language. Some ISBN registration agencies are based in national libraries or within ministries of culture, in other cases, the ISBN registration service is provided by organisations such as bibliographic data providers that are not government funded. In Canada, ISBNs are issued at no cost with the purpose of encouraging Canadian culture. In the United Kingdom, United States, and some countries, where the service is provided by non-government-funded organisations. Australia, ISBNs are issued by the library services agency Thorpe-Bowker
International Standard Book Number
–
A 13-digit ISBN, 978-3-16-148410-0, as represented by an
EAN-13 bar code
31.
Leila Schneps
–
Schneps earned a B. A. in Mathematics, German Language and Literature from Harvard/Radcliffe University in 1983, then took up graduate studies in France. In 1991 she was awarded a research position at CNRS, the French National Centre for Scientific Research, at the University of Franche-Comté in Besançon. During the late 1990s Schneps also had short-term visiting researcher assignments at Harvard University, Princetons Institute for Advanced Study, Schneps has published academic papers on various aspects of analytic number theory since the late 1980s. Her early work explored p-Adic L-functions, which became the topic of her first thesis, who taught me most of what I know about Galois actions on fundamental groups of varieties. Her work led to her study of the related Grothendieck–Teichmüller group and her most recent work has investigated various aspects of Lie algebras. Schneps has also edited and contributed to several mathematics textbooks in number theory and she was a co-author of a text on Field Theory and co-editor of another on Galois–Teichmüller Theory. Schneps latest book is Math on Trial, How Numbers Get Used and Abused in the Courtroom, while most reviews are positive, there has been some criticism concerning its over-simplification of mathematics influence in complex trial proceedings. Alexander Grothendieck, author of the theories upon which some of the works are based, became a recluse in 1991. More than a later, Schneps and Pierre Lochak located him in a town in the Pyrenees. Thus they became among the last members of the establishment to come into contact with him. She also assisted with the translation of his correspondence with Jean-Pierre Serre, the title is a double entendre, referring to both the mathematical problem and the three murder victims. While a mathematician reviewing the book disliked the Victorian writing style, he found the math accurate, and the mathematicians personalities and sociology well portrayed. When another reviewer contacted the author, she confirmed that Catherine Shaw was a pseudonym and that she was, in reality and it has since been revealed that Catherine Shaw is the pseudonym of Leila Schneps. The murder victim in the story was antisemitic, and the mentions the Dreyfus affair. The Riddle of the River explores the world, the late 19th century craze for séances. Finally, Fatal Inheritance explores the importance of heredity and how it might influence the health, Dr Freuds latest theories. Schneps has also published one book as Shaw, a guide to solving Sudoku. Schneps lectures and presents at conferences and seminars
Leila Schneps
–
Leila Schneps
Leila Schneps
–
"Catherine Shaw" redirects here. For the Canadian director and actor, see
Kathryn Shaw.
32.
Coralie Colmez
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Coralie Colmez is a French mathematician, tutor and author. Coralie Colmez is the daughter of mathematicians Pierre Colmez and Leila Schneps and she then became a mathematics tutor with a private tutoring firm, and with The Access Project, an organization that helps disadvantaged children gain entrance into top universities. She is now a co-director of unifrog, an organization that students choose universities. With her mother, mathematician Leila Schneps, Colmez has co-authored Math on Trial, while most reviews are positive, there has been some criticism that the book over-simplifies the influence mathematics has in complex trial proceedings. In a recent interview she hinted that another book is in the planning phase, in an online writers publishing forum she has also experimented with a math textbook for teenagers presented in the form of a teenagers personal diary. Since the publication of Math on Trial, Colmez has been a speaker at scientific education events in the UK
Coralie Colmez
–
Coralie Colmez
Coralie Colmez
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Coralie Colmez addressing students
Coralie Colmez
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Coralie Colmez speaking at QEDCon conference in 2014
33.
Confidence trick
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A confidence trick is an attempt to defraud a person or group after first gaining their confidence, used in the classical sense of trust. Confidence tricks exploit characteristics of the human psyche such as dishonesty, vanity, compassion, credulity, irresponsibility, naïveté, the perpetrator of a confidence trick is often referred to as a confidence man, con-artist, or a grifter. Samuel Thompson was the confidence man. Thompson was a swindler who asked his victims to express confidence in him by giving him money or their watch rather than gaining their confidence in a more nuanced way. A few people trusted Thompson with their money and watches, Thompson was arrested in July 1849. Reporting about this arrest, Dr. James Houston, a reporter of the New York Herald, although Thompson was an unsuccessful scammer, he gained reputation as a genius operator mostly because Houstons satirical writing wasnt understood. The National Police Gazette coined the term confidence game a few weeks after Houston first used the name, the confidence man. A confidence trick is known as a con game, a con, a scam, a grift, a hustle, a bunko, a swindle, a flimflam. The intended victims are known as marks, suckers, or gulls, when accomplices are employed, they are known as shills. A short con or small con is a fast swindle which takes just minutes and it typically aims to rob the victim of everything in his or her wallet. A long con or big con is a scam that unfolds over several days or weeks and involves a team of swindlers, as well as props, sets, extras, costumes, and scripted lines. It aims to rob the victim of huge sums of money or valuable things, often by getting him or her to empty out banking accounts, in Confessions of a Confidence Man, Edward H. Smith lists the six definite steps or stages of growth of a confidence game. He notes that some steps may be omitted, foundation Work Preparations are made in advance of the game, including the hiring of any assistants required. Build-up The victim is given an opportunity to profit from a scheme, the victims greed is encouraged, such that their rational judgment of the situation might be impaired. Pay-off or Convincer The victim receives a small payout as a demonstration of the schemes effectiveness and this may be a real amount of money, or faked in some way. In a gambling con, the victim is allowed to win small bets. In a stock market con, the victim is given fake dividends, the Hurrah A sudden crisis or change of events forces the victim to act immediately. This is the point at which the con succeeds or fails, the In-and-In A conspirator puts an amount of money into the same scheme as the victim, to add an appearance of legitimacy to the scheme
Confidence trick
–
Political Cartoon by
JM Staniforth:
Herbert Kitchener attempts to raise £100,000 for a College in Sudan by calling on the name of
Charles George Gordon
34.
Shill
–
Shills can carry out their operations in the areas of media, journalism, marketing, confidence games, or other business areas. A shill may also act to discredit opponents or critics of the person or organization in which they have a vested interest through character assassination or other means. The person or group in league with the shill relies on crowd psychology to encourage other onlookers or audience members to do business with the seller or accept the ideas they are promoting, Shills may be employed by salespeople and professional marketing campaigns. For example, a person planted in an audience to laugh and applaud when desired, shill can also be used pejoratively to describe a critic who appears either all-too-eager to heap glowing praise upon mediocre offerings, or who acts as an apologist for glaring flaws. The origin of the term shill is uncertain, it may be an abbreviation of shillaber, the word originally denoted a carnival worker who pretended to be a member of the audience in an attempt to elicit interest in an attraction. Some sources trace the usage back to 1914, in academia, this is called opinion spamming. Web sites can also be set up for the same purpose, in addition, some shills use sock puppetry, where they sign on as one user soliciting recommendations for a specific product or service. They then sign on as a different user pretending to be a customer of a specific company. In some jurisdictions and circumstances, this type of activity may be illegal, for example, the plastic surgery company Lifestyle Lift ordered their employees to post fake positive reviews on websites. As a result, they were sued, and ordered to pay $300,000 in damages by the New York Attorney Generals office, both the illegal and legal gambling industries often use shills to make winning at games appear more likely than it actually is. For example, illegal three-card monte and shell-game peddlers are notorious employers of shills and these shills also often aid in cheating, disrupting the game if the mark is likely to win. In a legal casino, however, a shill is sometimes a gambler who plays using the money in order to keep games going when there are not enough players. The title of one of Erle Stanley Gardners mystery novels, Shills Cant Cash Chips, is derived from type of shill. This is different from proposition players who are paid a salary by the casino for the same purpose, in marketing, shills are often employed to assume the air of satisfied customers and give testimonials to the merits of a given product. This type of shilling is illegal in some jurisdictions but almost impossible to detect, Shills, or potted plants, are sometimes employed in auctions. Driving prices up with phony bids, they seek to provoke a war among other participants. Often they are told by the seller precisely how high to bid, as the seller pays the price if the item does not sell. Shilling has a higher rate of occurrence in online auctions
Shill
35.
Advance-fee scam
–
An advance-fee scam is a form of fraud and one of the most common types of confidence trick. The scam typically involves promising the victim a significant share of a sum of money, in return for a small up-front payment. If a victim makes the payment, the fraudster either invents a series of further fees for the victim, there are many variations on this type of scam, including the 419 scam, the Spanish Prisoner scam, the black money scam and the Detroit-Buffalo scam. The scam has been used with fax and traditional mail, and is now prevalent in online communications like emails, the scam messages often claim to originate in Nigeria, but usually this is not true. The number 419 refers to the section of the Nigerian Criminal Code dealing with fraud, the modern scam is similar to the Spanish Prisoner scam dating back to the late 18th century. In that con, businessmen were contacted by an individual trying to smuggle someone connected to a wealthy family out of a prison in Spain. In exchange for assistance, the promised to share money with the victim in exchange for a small amount of money to bribe prison guards. And goes on to talk of a casket containing 16,000 francs in gold, the modern day transnational scam can be traced back to Germany in 1922, and became popular during the 1980s. There are many variants of the letters sent, one of these, sent via postal mail, was addressed to a womans husband, and inquired about his health. It then asked what to do with profits from a $24.6 million investment, other official-looking letters were sent from a writer who said he was a director of the state-owned Nigerian National Petroleum Corporation. He said he wanted to transfer $20 million to the bank account – money that was budgeted. In exchange for transferring the funds out of Nigeria, the recipient would keep 30% of the total, to get the process started, the scammer asked for a few sheets of the company’s letterhead, bank account numbers, and other personal information. The spread of e-mail and email harvesting software significantly lowered the cost of sending scam letters by using the Internet, while Nigeria is most often the nation referred to in these scams, they may originate in other nations as well. For example, in 2006, 61% of Internet criminals were traced to locations in the United States, while 16% were traced to the United Kingdom and 6% to locations in Nigeria. Other nations known to have an incidence of advance-fee fraud include Ivory Coast, Togo, South Africa, the Netherlands. One reason Nigeria may have been singled out is the apparently comical, according to Cormac Herley, a researcher for Microsoft, By sending an email that repels all but the most gullible, the scammer gets the most promising marks to self-select. Nevertheless, Nigeria has earned a reputation as being at the center of email scammers, in Nigeria, scammers use computers in Internet cafés to send mass emails promising potential victims riches or romance, and to trawl for replies. They refer to their targets as Magas, slang developed from a Yoruba word meaning fool, some scammers have accomplices in the United States and abroad that move in to finish the deal once the initial contact has been made
Advance-fee scam
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Scam letter posted within
South Africa
Advance-fee scam
–
An
Opte Project visualization of
routing paths through a portion of the Internet
Advance-fee scam
–
Western Union, Avenue de Choisy (fr),
Paris 13e
36.
Coin rolling scams
–
Coin-rolling related scams are a collection of scams involving coin wrappers. The scammer will roll coins of lesser value or slugs of no value, or less than the number of coins in a roll. To prevent these problems, many banks will require people turning in coins to have an account, some banks also have machines to count coins. The con will wrap pennies into a dime-roll wrapper and try to exchange it, sometimes the con will also exchange other legitimate rolls of coins at the same time. Another trick is to put dimes on the ends of the roll. This scam can also be done using nickels and quarters, alternatively, one can place one or two fewer coins than usual in each roll. Half-dollars are a choice for this kind of scam, for two reasons. First, there are only 20 coins per half-dollar roll, increasing the profit percentage, also, since half-dollars rarely circulate, most bank tellers are unaware of the proper length and/or weight of a roll. Also owing to their lack of circulation, the coins are not likely to be discovered for a long time. Another possibility is to pad foreign coins into the rolls, generally cancelled European coins are used. Such coins can often be purchased in bulk at flea markets, some con artists bank on the fact that the typical customer will just re-circulate these coins, or keep them for themselves thinking they are valuable. In the United States, it is not uncommon to find Canadian coins in circulation and it will be more unlikely to find 2 cent euro coin, other foreign pennies. Pennies from pre-2010 and nickels minted between 1982-2000 are very common because their composition is similar to American coins, so coin counting machines cant tell the difference, even when the Lira was legitimate currency,500 Lira was only worth €0.26. When depositing or changing, the bags are weighed at the bank to check they contain the right amount, the contents of the clear bag are easy for the bank teller to check
Coin rolling scams
–
The obsolete 500
Italian Lira coin, which is similar to the 2
Euro coin.
37.
Employment scams
–
A confidence trick is an attempt to defraud a person or group after first gaining their confidence, used in the classical sense of trust. Confidence tricks exploit characteristics of the human psyche such as dishonesty, vanity, compassion, credulity, irresponsibility, naïveté, the perpetrator of a confidence trick is often referred to as a confidence man, con-artist, or a grifter. Samuel Thompson was the confidence man. Thompson was a swindler who asked his victims to express confidence in him by giving him money or their watch rather than gaining their confidence in a more nuanced way. A few people trusted Thompson with their money and watches, Thompson was arrested in July 1849. Reporting about this arrest, Dr. James Houston, a reporter of the New York Herald, although Thompson was an unsuccessful scammer, he gained reputation as a genius operator mostly because Houstons satirical writing wasnt understood. The National Police Gazette coined the term confidence game a few weeks after Houston first used the name, the confidence man. A confidence trick is known as a con game, a con, a scam, a grift, a hustle, a bunko, a swindle, a flimflam. The intended victims are known as marks, suckers, or gulls, when accomplices are employed, they are known as shills. A short con or small con is a fast swindle which takes just minutes and it typically aims to rob the victim of everything in his or her wallet. A long con or big con is a scam that unfolds over several days or weeks and involves a team of swindlers, as well as props, sets, extras, costumes, and scripted lines. It aims to rob the victim of huge sums of money or valuable things, often by getting him or her to empty out banking accounts, in Confessions of a Confidence Man, Edward H. Smith lists the six definite steps or stages of growth of a confidence game. He notes that some steps may be omitted, foundation Work Preparations are made in advance of the game, including the hiring of any assistants required. Build-up The victim is given an opportunity to profit from a scheme, the victims greed is encouraged, such that their rational judgment of the situation might be impaired. Pay-off or Convincer The victim receives a small payout as a demonstration of the schemes effectiveness and this may be a real amount of money, or faked in some way. In a gambling con, the victim is allowed to win small bets. In a stock market con, the victim is given fake dividends, the Hurrah A sudden crisis or change of events forces the victim to act immediately. This is the point at which the con succeeds or fails, the In-and-In A conspirator puts an amount of money into the same scheme as the victim, to add an appearance of legitimacy to the scheme
Employment scams
–
Political Cartoon by
JM Staniforth:
Herbert Kitchener attempts to raise £100,000 for a College in Sudan by calling on the name of
Charles George Gordon
38.
Extraterrestrial real estate
–
Extraterrestrial real estate is land on other planets or natural satellites or parts of space that is sold either through organizations or by individuals. Ownership of extraterrestrial real estate is not recognized by any authority and these deeds have no legal standing. The topic of real estate on celestial objects has been present since the 1890s, dean Lindsay made claims for all extraterrestrial objects on June 15,1936. The public sent offers to buy objects from him as well, article VI vests the responsibility for activities in space to States Parties, regardless of whether they are carried out by governments or non-governmental entities. The Outer Space Treaty of 1967 has currently been ratified by 102 countries and it has also been signed by 26 other nations but not yet ratified. The international Moon Treaty, finalised in 1979 and entering into force in 1984, however, as of January 1,2013 only 15 states have ratified the agreement, and none of these are major space-faring nations. Kazakhstan has ratified the treaty and is host to the Baikonur Cosmodrome, however, the facility is operated through a leasing agreement by Russia. India, with missions of its own, has also signed the treaty. Whether these two treaties are the last word on the subject is disputed, the Outer Space Treaty permits states to withdraw from its terms with one years notification. A number of individuals and organisations offer schemes or plans claiming to allow people to purchase portions of the Moon or other celestial bodies, thus, while it does not explicitly prohibit such schemes, the treaty does require they be authorized by the schemers government. The short story The Man Who Sold the Moon by Robert A. Heinlein, which was written in 1949, offers a portrayal regarding such plans or schemes, heinleins Stranger in a Strange Land also makes reference to a space law case called the Larkin Decision. A space ownership issue of current practical importance is the allocation of slots for satellites in geostationary orbit and this is managed by the International Telecommunication Union. These claims did not receive international support or recognition and were subsequently largely abandoned. Chilean lawyer Jenaro Gajardo Vera became famous for his 1953 claim of ownership of the Moon, dean Lindsay made claims for all extraterrestrial objects on June 15,1936, and sent a letter to Pittsburgh Notary Public along with a deed and money for establishment of the property. The public sent offers to buy objects from him as well and he had previously made claims on the Atlantic and Pacific Oceans. James T. Mangan was an eccentric, public relations man. Mangan founded what he called the Nation of Celestial Space and registered it with the Recorder of Deeds and Titles of Cook County, Illinois, on January 1,1949. Robert R. Coles, former chairman of New Yorks Hayden Planetarium, started the interplanetary Development Corporation, dennis Hope, an American entrepreneur, sells extraterrestrial real estate
Extraterrestrial real estate
–
The Moon as seen by an observer from Earth. Some people claim that private ownership of the
Moon might be possible.
39.
Foreclosure rescue scheme
–
A foreclosure rescue scheme is a scam that targets those whose house is facing potential foreclosure. The scheme preys on desperate homeowners whose mortgages are in default by offering to prevent the foreclosure, foreclosure rescue schemes are typically advertised in a variety of informal settings, such as roadside signs. There are several ways foreclosure rescue schemes operate, In a lease-buyback scheme, the owner is promised to be able to rent the property back, which will be counted toward an eventual buyback. Equity stripping or equity skimming is a variation on lease-buyback and is one of the most common types of foreclosure rescue schemes. In it, the perpetrator assumes ownership of the house while allowing the owner to continue living there, provided that s/he pay rent to the perpetrator. The perpetrator often claims this ownership is temporary, and the victim will later reassume ownership of the once the terms of the loan are renegotiated. But after taking over the deed to the house, the perpetrator cashes out all the equity in the home, the perpetrator also collects money from the victim by charging rent to the victim for living in the house while not owning it. The final result is eviction from the house with zero equity paired with greater financial loss to the victim, the perpetrator, who then has ownership of the home, will either sell the property or allow it to go into foreclosure. A firm may offer to act as an agent to renegotiate the terms of a loan with the lender, lenders may accept this to guarantee payment now, rather than gamble on future values, ability of the owner to pay etc. In these cases the situation can be similar to the other schemes with the owner being offered the option to rent the property with a future buy back. As for the schemes in a scam situation the terms of any tenancy or buy back may also be set to the gross disadvantage of the original owner. Laws in all 50 U. S. states prohibit the operation of foreclosure rescue schemes, the United States Federal Government has been taking action to crack down on foreclosure rescue schemes. In 2009, the Obama Administrations anti-fraud initiative combined federal and state law enforcement efforts in fighting foreclosure rescue and these schemes are complex and require the retention and training of specialized attorneys and other staff. Limitations on available resources have been cited as a problem with these enforcement efforts. In 2007, the state of Massachusetts passed emergency legislation making it illegal for 90 days to operate a foreclosure rescue scam, the intention was to follow this up with a permanent ban
Foreclosure rescue scheme
–
A sign along the road advertising foreclosure rescue
40.
Fortune telling fraud
–
Fortune telling fraud, also called the bujo or egg curse scam, is a type of confidence trick, based on a claim of secret or occult information. The basic feature of the scam involves diagnosing the victim with some sort of problem that only the grifter can detect or diagnose. In this scam, a fortune teller uses her cold reading skill to detect that a client is genuinely troubled rather than merely seeking entertainment, or is a gambler complaining of bad luck. The fortune teller informs the mark that they are the victim of a curse, in Romany, this trick is called bujo, originally meaning simply bag, but now meaning a swindle involving a large amount of money from a gullible fortune-telling customer. These scams continue into the present day, sleight of hand tricks, such as removing a clump of hair from a newly broken egg, were used as evidence that a client was either possessed by an evil spirit or under the influence of a curse. The female member of the Merino clan devised methods of extracting the victims money, a Texas woman was sentenced to 2 1⁄2 years on Federal charges for wire fraud and money laundering after she operated a scam involving a psychic telephone line. Not only did she receive fees of several hundred dollars for her psychic counselling, in 2002, two self-described California based psychics were indicted on Federal mail fraud charges after persuading people to pay them to be cleared of bad karma. In 2006, two Connecticut women told another woman that God was going to kill her unless she paid them to various rituals, including chicken sacrifices. In Palmdale, California, a reader was accused of inducing a 12-year-old girl to steal $10,000 worth of jewelry from her parents by threats of a curse. In 2013, con artists running a classic bujo scam were reportedly targeting Asian immigrants in New York City, in Florida, a tarot card reader is facing trial for allegedly fleecing romance writer Jude Deveraux out of more than 25 million dollars. A desire to protect people from this scam has been one argument made to legislation that makes fortune telling a crime. The alleged scam lasted from August 2004 through October 2010 and is estimated to have cost the victim between 6 and 20 million USD, the victim later stated that he had been defrauded by grifters of the highest order. See Telemarketing fraud for information about a common scam in which fraud artists install malware on victims computers, advance fee fraud Chain letter Curse Oxford Capacity Analysis Quackery Rogue security software Virus hoax
Fortune telling fraud
–
While the fortune teller entertains him, he is robbed from behind. "The Fortune Teller" by
Simon Vouet.
41.
Priority Development Assistance Fund scam
–
Aside from the PDAF and the fertilizer fund maintained by the Department of Agriculture, around ₱900 million in royalties earned from the Malampaya gas field were also lost to the scam. The CDF was later renamed the PDAF in 2000, during the administration of Joseph Estrada, since 2008, every member of the House of Representatives usually receives an annual PDAF allocation of ₱70 million, while every senator receives an annual allocation of ₱200 million. The President also benefits from a PDAF-like allocation, the Presidents Social Fund, contrary to public belief, however, PDAF allocations are not actually released to members of Congress. Because presidential systems are prone to political gridlock, the PDAF is often used as a means to generate majority legislative support for the programs of the executive. Furthermore, because PDAF allocations are released by the Department of Budget and Management, PDAF allocation has gradually increased over the years. The PDAF has proven to be unpopular, with numerous calls for its abolition. Public outrage over the misuse of the CDF was instrumental in the enactment of reforms led to the formation of the PDAF. The constitutionality of the PDAF has also challenged in the Supreme Court. This ruling was reaffirmed in 2001, when the PDAF was challenged again in the Supreme Court, the PDAF or Pork Barrel Scam involved the funding of ghost projects that were funded using the PDAF funds of participating lawmakers. These projects were in turn implemented through Napoles companies, with the projects producing no tangible output, Napoles, who specialized in trading agricultural products, frequently used the procurement of agricultural inputs in the propagation of the scam. The NCA would then be deposited in one of the accounts. The funds would then be split between Napoles, the lawmaker, the official of the DA responsible for facilitating the transfer of funds and, for good measure, the local mayor or governor. All documents involving local government units were prepared by Napoles staff, local government officials who were used by Napoles were often unaware that they were participating in the scam. In other instances, however, Napoles would use emissaries to establish contact with local mayors in exchange for commissions that would come from the implementation of these projects. In the initial report published by the Philippine Daily Inquirer,28 members of Congress were named as participants in the PDAF scam. Twelve of these legislators were identified by the newspaper, and close to ₱3 billion in PDAF funds coming from these alone were exposed to the scam. Notably, the Inquirer named Bong Revilla, Juan Ponce Enrile, Jinggoy Estrada, Ferdinand Marcos, Jr. other legislators identified by the Inquirer as participating in the scam include La Union Representative Victor Ortega and former Representative Arthur Pingoy. Early reports had also identified Senator Loren Legarda as one of the participants in the scam, legislators identified by the Inquirer as participants in the PDAF scam—Bong Revilla in particular—have denied their participation in the scam
Priority Development Assistance Fund scam
–
Two infographs on the PDAF produced by the Assembly, the Political Science Organization of the
Ateneo de Manila University.
42.
Shell game
–
The shell game is portrayed as a gambling game, but in reality, when a wager for money is made, it is almost always a confidence trick used to perpetrate fraud. In confidence trick slang, this swindle is referred to as a short-con because it is quick, in the shell game, three or more identical containers are placed face-down on a surface. A small ball is placed one of these containers so that it cannot be seen. One or more players are invited to bet on which container holds the ball – typically, where the game is played honestly, the operator can win if he shuffles the containers in a way which the player cannot follow. The shell game dates back at least to Ancient Greece and it can be seen in several paintings of the European Middle Ages. A book published in England in 1670 mentions the thimblerig game, in the 1790s, it was called thimblerig as it was originally played using sewing thimbles. Later, walnut shells were used, and today the use of caps or matchboxes is common. The swindle became very popular throughout the century, and games were often set up in or around traveling fairs. A thimblerig team was depicted in William Powell Friths 1858 painting and my first Derby had no interest for me as a race, but as giving me the opportunity of studying life and character it is ever to be gratefully remembered. Gambling-tents and thimble-rigging, prick in the garter and the trick, had not then been stopped by the police. You, said Egg, addressing the divine, you are a confederate, you know, look here, said the clergyman, dont you call names, and dont call me names, or I shall knock your d — d head off. Said Egg, his courage rising as he saw two policemen approaching, then I call the lot of you — the Quaker there, no more a Quaker than I am, and that fellow that thinks he looks like a farmer — you are a parcel of thieves. So they are, sir, said a meek-looking lad who joined us, now move off, clear out of this. Said the police, and the gang walked away, the turning and extending his arms in the act of blessing me. Fear of jail and the need to find new flats kept these sharps traveling from one town to the next, today, the game is still being played for money in many major cities around the world, usually at locations with a high tourist concentration. The swindle is classified as a confidence game, and illegal to play for money in most countries. The shuffling is allowed before the pricing part of the game begins. Federal game show regulations are designed to ensure the game is legally a game that can be won
Shell game
–
An illegal shell game performed with bottle caps on
Fulton Street in
New York City
Shell game
–
An illegal shell game in
Drottninggatan, a street in
Stockholm.
Shell game
–
"The Conjurer," painted by
Hieronymus Bosch. The painting accurately displays a performer doing the
cups and balls routine, which has been practiced since Egyptian times. The shell game does have some origins in this old trick. The real trick of this painting is the pickpocket who is working for the conjurer. The pickpocket is robbing the spectator who is bent over.
43.
Swampland in Florida
–
Swampland in Florida refers to decades-old but still recurring real estate scams involving swamp lands misrepresented as being possible to develop, or buildable. These scams became widely known and now also have meaning as a figure of speech. Expressions like I have swampland in Florida to sell you or I have prime swampland to sell you are slang expressions that suggest the recipient shows gullibility. They say figuratively that someone lacks sense like one who would fall for an old deception or fraud of paying large amounts of money for an item such as swampland. These phrases are often preceded by or imply, If you believe that then, sometimes other swampy locations besides Florida are used in the term. The phrase originates from the land banking scams of the 1920s. One of the sellers of swampland was Charles Ponzi. Similar terms came from the early 20th century where con-men would sell landmarks to which no one owns the title such as the Brooklyn Bridge to newly arrived immigrants in the United States. The phrase about gullibility referring to those events said, if you believe that and those evolved in the 1960s and 1970s to include fraudulent sales of worthless swampland real estate in Florida. Though the term originates in the United States, it is now also understood, grant Oster points out that the practice of the unseen property scam predates the existence of the United States. He points to Erik the Reds sale of colonization of Greenland, circa 982, the common usage of this term implies that swampland is worthless. Without development or some ability to develop it, it is not valuable for real estate purposes, on the other hand, there are also arguments made for the value of scenery and wildlife found in swamplands in their natural condition. Sometimes that is done by businesses to meet a development permit requirement to preserve some Florida land in order to build on other Florida land, in the 1960s and 1970s, scammers used nationwide advertising to lure victims to buy Florida real estate without visiting the properties first. This technique was used notably by the Gulf American Land Corp. in the communitites of Cape Coral and Golden Gate Estates and it was a form of confidence trick. The new owners came to find their land was under water in a swamp or in other way impossible to build upon. As the scam became widely known, California and New York legislators acted in 1963 to restrict this false advertising, Florida also enacted the Installment Land Sales Act that year in an effort to restore its reputation. Swampland scams still occur in Florida, the Internet has brought about a resurgence via online auctions of Florida real estate. Scammers circumvent commercial registration requirements by making one-on-one sales, over great distances some buyers can be convinced to pay before verifying claims
Swampland in Florida
–
A freshwater swamp in
Florida.
44.
Three-card Monte
–
It is the same as the shell game except that cards are used instead of shells. The Mark has no chance whatsoever of winning, at any point in the game, in fact, anyone who is observed winning anything in the game can be presumed to be a shill. This confidence trick was already in use by the turn of the 15th century, the three-card Monte game itself is very simple. To play, a dealer places three cards face down on a table, usually on a box which provides the ability to set up. The dealer shows that one of the cards is the card, e. g. the queen of hearts. The player is given an opportunity to select one of the three cards. If the player identifies the target card, the player gets the amount bet back, plus the same amount again, otherwise. Since there are three cards, the jack of spades and jack of clubs often complement the money card. The queen is often a red card, typically the queen of hearts, sometimes the ace of spades is used as the money card, since the ace of spades is viewed as lucky, which might lure the mark into playing the game. When the mark arrives at the three-card Monte game, it is likely that a number of players will be seen winning and losing money at the game. The people engaged in playing the game are often shills, confederates of the dealer who pretend to play so as to give the illusion of a gambling game. As the mark watches the game, they are likely to notice that they can follow the more easily than the shills seem to be able to. Eventually, if the mark enters the game, they will be cheated through any number of methods, an example of a simple scheme involves a dealer and two shills, The dealer and shills act as if they do not know each other. The mark will come upon a game being conducted in a clandestine manner. The dealer will be engaged in his role, with the first shill betting money and this conversation is engineered to implicitly encourage the mark to play, and it is possible the second shill could resort to outright encouragement. If the mark does not enter the game, the dealer may claim to see police and will fold up the operation and restart it elsewhere, if the mark enters the game, they may be had by a number of techniques. A common belief is that the operator may let the mark win a couple of bets to suck them in, in a true Monte scam, the mark will never win a single bet, as it is not necessary. There are too many ways for a mob to attract the marks, suck them in
Three-card Monte
–
A three-card Monte game in
Jaffa,
Israel (2005). It has all the hallmarks of the con; the cards are slightly curved, the corners have been bent and the dealer has the cash in hand to conceal any sleight-of-hand.
Three-card Monte
–
A Three-card Monte stand in
Warsaw, July 1944
45.
Work-at-home scheme
–
Work-at-home schemes have been around for decades, with the classic envelope stuffing scam originating in the United States during the Depression in the 1920s and 1930s. In this scam, the worker is offered entry to a scheme where they can earn $2 for every envelope they fill. Originally found as printed adverts in newspapers and magazines, variants of this scam have expanded into more modern media, such as television and radio adverts, in some countries, law enforcement agencies work to fight work-at-home schemes. In 2006, the United States Federal Trade Commission established Project False Hopes, the crackdown involved more than 100 law enforcement actions by the FTC, the Department of Justice, the United States Postal Inspection Service, and law enforcement agencies in eleven states. A2007 report in the United States suggested that about 97% of work-at-home offers were scams, common types of work found in work-at-home schemes include, Stuffing envelopes. The victim sees a flyer advertising a job stuffing envelopes, with up to 1,000 envelopes a week that you can stuff, with postage and address already affixed. Offering a payment of $1–2 per envelope, to apply for the job, the victim is required to send a self-addressed stamped envelope for information and a small processing fee. In return, the victim is sent a template for the flyer they had seen, the envelopes they stuff are from other people who answer the flyer. Assembly of items of some type, such as crafts, jewellery or medical equipment, usually advertised as some variant of email processing, the worker is simply given instructions on spamming online forums, and told they can make money by selling these same instructions online. Sales of a product or service that is difficult or impossible to sell and this is often done in the form of a pyramid scheme. Many such ads do not even specify the type of work that will be performed. Some similar schemes do not advertise work that would be performed at home, Some common offers fitting this description are acting as extras, mystery shopping and working as a nanny. Signs of a work-at-home scam versus a legitimate job may include, in the United States, the Federal Trade Commission states that under no circumstances should anyone be forced to pay a fee in order to obtain a job. In many countries, no legitimate employer will require a fee be paid as a condition of starting work, pay is too good to be true. Employer will seemingly hire anyone, with no necessary and no qualifications. But the perpetrator of a scheme is only interested in the payment required to join. Company is little known, and does not seemingly have a customer base bringing them revenue from which they can pay employees, company name is similar to, but not exactly the same as a well known, legitimate company. Company does not appear to have a permanent location and its address, phone number, and website appear to be centered on recruitment of employees, not customers
Work-at-home scheme
–
An ad for a work-at-home scheme posted on a pole
46.
Carding (fraud)
–
Carding is a term describing the trafficking of credit card, bank account and other personal information online as well as related fraud services. Activities also encompass procurement of details, and money laundering techniques, modern carding sites have been described as full-service commercial entities. There are a great many of methods to acquire credit card, the earliest known carding methods have also included trashing for financial data, raiding mail boxes and working with insiders. Some bank card numbers can be generated based on known sequences via a BIN attack. Carders might attempt a distributed guessing attack to discover valid numbers by submitting numbers across a number of ecommerce sites simultaneously. Today, various methodologies include skimmers at ATMs, hacking an ecommerce or payment processing site or even intercepting card data within a point of sale network, randomly calling hotel room phones asking guests to confirm credit card details is example of a social engineering attack vector. Stolen data may be bundled as a Base or First-hand base if the seller participated in the theft themselves, resellers may buy packs of dumps from multiple sources. Ultimately, the data may be sold on markets and other carding sites. On the more sophisticated of such sites, individual dumps may be purchased by zip code, automatic checker services perform validation en masse in order to quickly check if a card has yet to be blocked. Sellers will advertise their dumps valid rate, based on estimates or checker data, cards with a greater than 90% valid rate command higher prices. Cobs or changes of billing are highly valued, where sufficient information is captured to allow redirection of the registered cards billing and shipping addresses to one under the carders control. Full identity information may be sold as Fullz inclusive of social security number, data of birth, fraudulent vendors are referred to as rippers, vendors who take buyers money then never deliver. This is increasingly mitigated via forum and store based feedback systems as well as through strict site invitation, whilst some carding forums will exist only on the dark web, today most exist on the internet, and many will use the Cloudflare network protection service. Increased law enforcement scrutiny over reshipping services has led to the rise dedicated criminal operations for reshipping stolen goods, hacked computers may be configured with SOCKS proxy software to optimise acceptance from payment processors. In December 2005 its owner Douglas Jacksons house and businesses were raided as a part of Operation Goldwire, Jackson discovered that the service had become a bank and transfer system to the criminal underworld. Pressured to disclose ongoing records disclosed to law enforcement, many arrests were made through to 2007, however, in April 2007 Jackson himself was indicted for money laundering, conspiracy and operating an unlicensed money transmitting business. This led to the service freezing the assets of users in high risk countries, since 2006, Liberty Reserve had become a popular service for cybercriminals. When it was seized in May 2013 by the US government, today, some carders prefer to make payment between themselves with bitcoin, as well as traditional wire services such as Western Union, MoneyGram or the Russian WebMoney service
Carding (fraud)
–
Screenshot of a carding site
Carding (fraud)
–
Screenshot from
AOHell
Carding (fraud)
–
Master Splynter explaining
DarkMarket 's invite and vendor policies
47.
Clickjacking
–
It is a browser security issue that is a vulnerability across a variety of browsers and platforms. A clickjack takes the form of embedded code or a script that can execute without the users knowledge, the term clickjacking was coined by Jeremiah Grossman and Robert Hansen in 2008. Clickjacking can be understood as an instance of the confused deputy problem, Clickjacking is possible because seemingly harmless features of HTML web pages can be employed to perform unexpected actions. A clickjacked page tricks a user into performing undesired actions by clicking on a concealed link, on a clickjacked page, the attackers load another page over it in a transparent layer. The users think that they are clicking visible buttons, while they are actually performing actions on the hidden/invisible page, the hidden page may be an authentic page, therefore, the attackers can trick users into performing actions which the users never intended. There is no way of tracing such actions to the attackers later, as the users would have been genuinely authenticated on the hidden page. A user might receive an email with a link to a video about a news item, the user tries to play the video but actually buys the product from Amazon. The hacker can send a single click, so they rely on the fact that the visitor is both logged into Amazon. com and has 1-click ordering enabled. Clickjacking may be facilitated by - or may facilitate - other web attacks, likejacking is a malicious technique of tricking users of a website into liking a Facebook page that they did not intentionally mean to like. According to an article in IEEE Spectrum, a solution to likejacking was developed at one of Facebooks hackathons, a Like bookmarklet is available that avoids the possibility of likejacking present in the Facebook Like Button. Most managers did not protect against iFrame and redirection based attacks, according to Googles Browser Security Handbook from year 2008, NoScripts ClearClick is the only freely available product that offers a reasonable degree of protection against Clickjacking. Protection from the newer cursorjacking attack was added to NoScript 2.2.8 RC1, guardedID includes client-side clickjack protection for users of Internet Explorer and Firefox without interfering with the operation of legitimate iFrames. GuardedID clickjack protection forces all frames to become visible, Gazelle is a Microsoft Research project secure web browser based on IE, that uses an OS-like security model, and has its own limited defenses against clickjacking. In Gazelle, a window of different origin may only draw dynamic content over another windows screen space if the content it draws is opaque, such JavaScript-based protection, unfortunately, is not always reliable. This is especially true on Internet Explorer, where this kind of countermeasure can be circumvented by design by including the targeted page inside an <IFRAME SECURITY=restricted> element. Introduced in 2009 in Internet Explorer 8 was a new HTTP header X-Frame-Options which offered a protection against clickjacking and was shortly after adopted by other browsers. In addition to that, some advertising sites return a non-standard ALLOWALL value with the intention to allow framing their content on any page, in 2013 the X-Frame-Options header has been officially published as RFC7034, but is not an internet standard. The document is provided for informational purposes only, the frame-ancestors directive of Content Security Policy can allow or disallow embedding of content by potentially hostile pages using iframe, object, etc
Clickjacking
–
"potential clickjacking" warning from the "NoScript" internet-browser addon
48.
Cybercrime
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Cybercrime, or computer related crime, is crime that involves a computer and a network. The computer may have used in the commission of a crime. Debarati Halder and K. Cybercrime may threaten a person or a nations security, there are also problems of privacy when confidential information is intercepted or disclosed, lawfully or otherwise. Debarati Halder and K. Internationally, both governmental and non-state actors engage in cybercrimes, including espionage, financial theft, and other cross-border crimes, activity crossing international borders and involving the interests of at least one nation state is sometimes referred to as cyberwarfare. Approximately $1.5 billion was lost in 2012 to online credit and debit card fraud in the US, in 2016, a study by Juniper Research estimated that the costs of cybercrime could be as high as 2.1 trillion by 2019. Computer crime encompasses a range of activities. Computer fraud is any dishonest misrepresentation of fact intended to let another to do or refrain from doing something which causes loss, in this context, the fraud will result in obtaining a benefit by, Altering in an unauthorized way. A variety of scams, many based on phishing and social engineering, target consumers. Government officials and information technology security specialists have documented a significant increase in Internet problems, cyberterrorism in general can be defined as an act of terrorism committed through the use of cyberspace or computer resources. As such, a propaganda piece in the Internet that there will be bomb attacks during the holidays can be considered cyberterrorism. Cyberextortion occurs when a website, e-mail server, or computer system is subjected to or threatened with repeated denial of service or other attacks by malicious hackers and these hackers demand money in return for promising to stop the attacks and to offer protection. More than 20 cases are reported each month to the FBI, perpetrators typically use a distributed denial-of-service attack. An example of cyberextortion was the attack on Sony Pictures of 2014, the U. S. Department of Defense notes that the cyberspace has emerged as a national-level concern through several recent events of geo-strategic significance. Among those are included, the attack on Estonias infrastructure in 2007, in August 2008, Russia again allegedly conducted cyberattacks, this time in a coordinated and synchronized kinetic and non-kinetic campaign against the country of Georgia. Fearing that such attacks may become the norm in future warfare among nation-states and these crimes are committed by a selected group of criminals. Unlike crimes using the computer as a tool, these require the technical knowledge of the perpetrators. As such, as technology evolves, so too does the nature of the crime and these crimes are relatively new, having been in existence for only as long as computers have—which explains how unprepared society and the world in general is towards combating these crimes. These crimes generally involve less technical expertise, the damage dealt is largely psychological and intangible, making legal action against the variants more difficult
Cybercrime
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Sailors analyze, detect and defensively respond to unauthorized activity within
U.S. Navy information systems and computer networks
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DarkMarket
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Subramaniam, who used the alias JiLsi, admitted conspiracy to defraud and was sentenced to nearly five years in prison in February 2010. The website allowed buyers and sellers of stolen identities and credit card data to meet and conduct criminal enterprise in an entrepreneurial and it had 2,500 users at its peak. He obtained full access to using the site and what they were doing by securing the server after gaining Subramaniams confidence. Working with our partners in the United Kingdom, Germany, and Turkey. Using undercover techniques, the FBI penetrated the highest levels of this group, in a speech to the GovSec/FOSE Conference on March 23,2010, Chabinsky related explained Not long ago, there was an online carding forum named Darkmarket. It had members worldwide who were involved in buying and selling stolen financial information, such as credit card data, login credentials, because the FBI infiltrated it and brought it down. Still, its a lot of work to take down a single forum, but it shows we can succeed if we have the people in place. We also learned that the methods used by these criminals are, to them. Just as often as they are speaking about malware, crimes, and goods for sale, they are talking about their families, their girlfriends, their vacations, after a time, members of these forums become friends. That is where the intrinsic trust stems from, the Darkmarket case also provides us with insight into cyber crime tradecraft. Cyber criminals deploy countermeasures that can cost them a lot of time and effort, consider the fact that cyber criminals routinely change their nicknames, e-mails, digital currency accounts, and the ICQ numbers they use in forums. Not only do they change these accounts and identifying numbers, another DarkMarket member, Thomas James Frederick Smith, pleaded guilty on June 10,2010 to conspiracy to intentionally cause damage to a protected computer and to commit computer fraud. Glenny, Misha, DarkMarket, cyberthieves, cybercops, and you, New York, NY, Alfred A. Knopf,2011
DarkMarket
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Master Splynter explaining DarkMarket's invite and vendor policies
50.
Domain name scams
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The Office of Fair Trading in the United Kingdom has outlined two types of domain name scams which are Domain name registration scams and Domain name renewal scams. The term derives from telephone slamming, in 2004, ICANN, the domain name governing body, made changes to its policy for transferring domains between registrars. They introduced a single protective measure that can prevent unauthorized transfers. Critics, although advising owners to apply the new feature, said that this was an unnecessary, scam methods may operate in reverse, with a stranger communicating an offer to buy a domain name from an unwary owner. By mimicking aspects of the sales process and agencies, the scheme appears genuine in the early stages. The prospect of an easy, lucrative sale disarms the owners normal suspicion of an offer from a stranger with no earnest value. Since an actual transfer through the system is never involved. Often, these domains will be the same as the one owned by the targeted individual but with different TLDs. If the scam target does respond by email or by phone, if the target agrees to the deal, the domainer will then purchase the domains on the spot for the regular $7~20 registration fee and immediately sell it back to the victim for a few hundred dollars. This section outlines reported domain scams as a timeline of events, showing how they have evolved, the companies involved, in 2001, the federal Competition Bureau issued a warning about documents that appeared to be invoices sent out by a business called the Internet Registry of Canada. The Internet Registry of Canada is not associated with any government agency, VeriSign was sued in 2002 for their actions in sending ambiguous emails informing people, often incorrectly, that their domain was about to expire and inviting them to click on a link to renew it. Renewing the domain resulted in the company being transferred to VeriSign from the previous registrar. In March 2002, the FTC shut down TLD Network Ltd, TBS Industries Ltd. of London, England for selling bogus domain names. USA. BRIT, which they deceptively marketed as usable suffixes. In April 2002, the FTC charged National Domain Name Registry, Electronic Domain Name Monitoring, Corporate Domain Name Monitoring, on 2 July 2002, the Domain Registry served papers against Canada-based domain registrar Tucows Inc for alleged defamation and sought $21 m in damages. Tucows later said, The Company does not believe it will be liable for any damages, in 2002, Register. com sued Domain Registry of America, claiming the company illegally lured away thousands of customers by tricking them into transferring their domains. In 2003, Dutch hosting provider Deinternetman pondered legal action against Domain Registry of Europe for sending their customers letters urging them to renew their domain contracts. In 2003, VeriSign was found not to have broken the law but were barred from suggesting that a domain was about to expire or that a transfer was actually a renewal. net. au” instead of “. In 2006, reports appeared from New Zealand that Blair Rafferty had resurrected his bankrupt brother Chesleys domain name service, domain slamming New Zealand and Australian registrants
Domain name scams
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