this fills me with righteous anger
The Scam Wall Street Learned from the Mafia
11–20 of 77 posts
Re: The Scam Wall Street Learned from the Mafia
#12'Wall Street does X' and 'the Mafia does X' does not in any way imply that Wall Street learned X from the Mafia - and there's no evidence in the article, either. Typical Tabibi bombast. I suspect bid-rigging, while unethical, is pretty common behavior given this type of auction mechanic - all the buyers are knowledgeable and known to each other, while the seller is relatively ignorant and only participates in the mar…
You are missing the point; titling the article "The Scam Wall Street Learned From the Mafia" is a rhetorical device used by the author to illustrate the criminal nature of what went on and draw parallels to activity that is commonly understood by the average person to be unethical. The author isn't trying to suggest that these banks literally learned this from the mafia.
"the crimes the defendants and their co-conspirators committed were virtually indistinguishable from the kind of thuggery practiced for decades by the Mafia, which has long made manipulation of public bids for things like garbage collection and construction contracts a cornerstone of its business."
Re: The Scam Wall Street Learned from the Mafia
#13this fills me with righteous anger
Imposibruuu ! This is amerika !
Re: The Scam Wall Street Learned from the Mafia
#14So municipalities tried to game the system by instituting closed auctions instead of the open ones, and then got mad, when it turned out that some parties are willing to pay to peek into the sealed bids? An open auction system would not have created the peeking problem in the first place. Both parties tried to institute unreasonable complexity to get an upper hand.
Can you explain further? What do you mean by "closed" and "open" auction? AFAIK, they outsourced the auction process to a third-party company specializing in conducting auctions. That company and the bidders colluded to defraud municipalities. Corrupt auctioneers also paid bribes to politicians to get hired as as auctioneers. Do you really not see anything wrong with this picture? Edit: Removed paragraph with analogy…
An open auction is one where everyone's bids are public and visible to everyone hence allowing price discovery, contrasted with a closed auction, one where the bids are sealed and not disclosed to any other parties. It seemed from the article that the bids were submitted over the phone and known to the broker ahead of the conclusion of the auction, as opposed to a sealed first-price auction.
Re: The Scam Wall Street Learned from the Mafia
#15So municipalities tried to game the system by instituting closed auctions instead of the open ones, and then got mad, when it turned out that some parties are willing to pay to peek into the sealed bids? An open auction system would not have created the peeking problem in the first place. Both parties tried to institute unreasonable complexity to get an upper hand.
Can you explain further? What do you mean by "closed" and "open" auction? AFAIK, they outsourced the auction process to a third-party company specializing in conducting auctions. That company and the bidders colluded to defraud municipalities. Corrupt auctioneers also paid bribes to politicians to get hired as as auctioneers. Do you really not see anything wrong with this picture? Edit: Removed paragraph with analogy…
They're sealed bid auctions.
You can see what the others bid on eBay. If you choose to bid just a penny over the highest bid (as opposed to bidding up by a larger amount), you're unlikely to be prosecuted.
Re: The Scam Wall Street Learned from the Mafia
#16Re: The Scam Wall Street Learned from the Mafia
#17this fills me with righteous anger
Imposibruuu ! This is amerika !
I see you're a new user: this type of comment is, by consensus and executive decree, not welcome on Hacker News. If you don't have something genuinely novel to contribute to the conversation, please do your part to keep the noise low.
This applies to the grandparent comment as well. If people seem to be jumping on your comment more than hers, it's because yours smells worse on the surface. But honestly, the grandparent is more insidious for being less obviously out of place but being similarly empty.
Re: The Scam Wall Street Learned from the Mafia
#18Earlier quoted context omitted.
Can you explain further? What do you mean by "closed" and "open" auction? AFAIK, they outsourced the auction process to a third-party company specializing in conducting auctions. That company and the bidders colluded to defraud municipalities. Corrupt auctioneers also paid bribes to politicians to get hired as as auctioneers. Do you really not see anything wrong with this picture? Edit: Removed paragraph with analogy…
They're sealed bid auctions. You can see what the others bid on eBay. If you choose to bid just a penny over the highest bid (as opposed to bidding up by a larger amount), you're unlikely to be prosecuted.
And the problem was that they became UNsealed auctions due to corruption.
After reading the article, are you saying that the auctioneer conducted a proper sealed auction?
AFAIK, it is the norm worldwide in private as well as public sectors for contracts to be given out via sealed bid auctions, as opposed to ebay-style open auctions.
The ebay-style process works for ebay because there are large number of potential buyers who don't know each other. IMHO, if multi-round open bidding is allowed for auctions like this with a limited number of possible bidders, price collusion is likely to occur even more easily.
Re: The Scam Wall Street Learned from the Mafia
#19I hate to ask, but might there be a tl:dr; summary? That's a lot of text. I'm interested, but I don't really want to spend that much time on storytelling.
Re: The Scam Wall Street Learned from the Mafia
#20Earlier quoted context omitted.
Can you explain further? What do you mean by "closed" and "open" auction? AFAIK, they outsourced the auction process to a third-party company specializing in conducting auctions. That company and the bidders colluded to defraud municipalities. Corrupt auctioneers also paid bribes to politicians to get hired as as auctioneers. Do you really not see anything wrong with this picture? Edit: Removed paragraph with analogy…
An open auction is one where everyone's bids are public and visible to everyone hence allowing price discovery, contrasted with a closed auction, one where the bids are sealed and not disclosed to any other parties. It seemed from the article that the bids were submitted over the phone and known to the broker ahead of the conclusion of the auction, as opposed to a sealed first-price auction.
Just to be clear, telling the broker their bid instead of just sending it sealed is exactly the corruption that's being discussed in the article.
AFAIK, it wasn't legal for the bidders to tell the auctioneer what their bid was.