Professor Elam

A bubble refers to excess speculation in a market. The bubble finally bursts leaving investors holding as they say, the bag.  Here is a story on how vaunted Lehman Brothers was scammed for inflated properties.  Every bubble brings such fraud schemes.  In the 1920s cunning con men created phony companies or mis represented earnings. in the 1990s we saw multiple firms misrepresent their situations.  Now con men buy a cheap property, inflate the value of homes with a bogus appraisal, borrow the money againt the inflated value, and leave town.  This is a lively article involving storing wine collections elsewhere with an air conditioner to keep them chilled, a flight to a South Pacific island etc.  The crooks weren’t so smart either, the real name for Samoa is American Samoa, the authorities had not problem extraditing them back to the US.

Lehman Brothers has been a broker and investment banker.  They got our of their realm and started directly loaning money on houses. Gee they don’t look so smart now!

We study accounting to better understand, analyze, and hopefully anticipate these kinds of financial train wrecks, that is what this blog is all about.  The veneer of civilized society is pretty thin, the real crooks are not the ones robbing the liquor stores at gunpoint, the crooks are the ones robbing Lehman Brothers for $50 M , no gun required.  White collar crime like this will dwarf ordinary street crime in its boldness and its size for the forseeable future.