Fake US Treasury Bond Arrests

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

Fake US Treasury Bond Arrests

Postby NAVigator » Fri Feb 17, 2012 5:11 pm

Here is a HUGE US paper bond fraud that was luckily thwarted;
Record $6 Trillion of Fake U.S. Bonds Seized - Bloomberg

Phony U.S. securities have been seized in Italy before and there were at least three cases in 2009. Italian police seized phony U.S. Treasury bonds with a face value of $116 billion in August of 2009 and $134 billion of similar securities in June of that year.


Perhaps that is why TD is striving to remove the paper bonds.

Jerry
"I was born with nothing and I have most of it left."
User avatar
NAVigator
 
Posts: 2458
Joined: Tue Feb 27, 2007 8:24 am
Location: Iowa

Re: Fake US Treasury Bond Arrests

Postby neurosphere » Fri Feb 17, 2012 5:45 pm

The U.S. embassy in Rome has examined the securities dated 1934, which had a nominal value of $1 billion apiece, they said in the statement.


one billion dollars for each bond, dated 1934? Where would a forger go to collect on that?

NS
I am not an actor, even though I play one on television.
User avatar
neurosphere
 
Posts: 1355
Joined: Sun Jan 17, 2010 2:55 pm
Location: NYC

Re: Fake US Treasury Bond Arrests

Postby chaz » Fri Feb 17, 2012 5:48 pm

Diversify.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
chaz
 
Posts: 13114
Joined: Tue Feb 27, 2007 3:44 pm

Re: Fake US Treasury Bond Arrests

Postby Default User BR » Fri Feb 17, 2012 6:33 pm

chaz wrote:Diversify.

Make sure you get a variety of fake bonds?


Brian
Default User BR
 
Posts: 7503
Joined: Mon Dec 17, 2007 8:32 pm

Re: Fake US Treasury Bond Arrests

Postby downshiftme » Fri Feb 17, 2012 6:43 pm

If the value of a single fake bond was $1 Billion, how did they expect to get any payout from the fraud? It's not like you can take that to a bank and ask to cash it in. This makes about as much sense as the guy who tried to use a $1 Million dollar bill at Walmart.
downshiftme
 
Posts: 637
Joined: Sun Mar 11, 2007 7:11 pm

Re: Fake US Treasury Bond Arrests

Postby saied45 » Fri Feb 17, 2012 6:47 pm

does this mean now that the value of bonds will go up?
saied45
 
Posts: 119
Joined: Sat Oct 08, 2011 7:08 pm

Re: Fake US Treasury Bond Arrests

Postby Epsilon Delta » Fri Feb 17, 2012 6:54 pm

Aren't these as phony as $3 bills? As far as I can tell:
1) The US never issued $1,000,000,000 bearer bonds. $10,000 is the largest face value.
2) All US bearer bonds have matured.

So if these forgeries present any risk to financial institutions we have much worse problems, namely that financial institutions are being run by morons.
User avatar
Epsilon Delta
 
Posts: 3372
Joined: Thu Apr 28, 2011 8:00 pm

Re: Fake US Treasury Bond Arrests

Postby xerty24 » Fri Feb 17, 2012 6:57 pm

Epsilon Delta wrote:... we have much worse problems, namely that financial institutions are being run by morons.

And in other recent news...
No excuses, no regrets.
xerty24
 
Posts: 4830
Joined: Tue May 15, 2007 4:43 pm

Re: Fake US Treasury Bond Arrests

Postby livesoft » Fri Feb 17, 2012 6:59 pm

The fake bonds were not meant to be cashed in. They were meant to be sold to the Greater Fool.
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
livesoft
 
Posts: 33245
Joined: Thu Mar 01, 2007 9:00 pm

Re: Fake US Treasury Bond Arrests

Postby xerty24 » Fri Feb 17, 2012 8:00 pm

livesoft wrote:The fake bonds were not meant to be cashed in. They were meant to be sold to the Greater Fool.

Which is absolutely completely different than all those non-fake little green pieces of paper ;).
No excuses, no regrets.
xerty24
 
Posts: 4830
Joined: Tue May 15, 2007 4:43 pm

Re: Fake US Treasury Bond Arrests

Postby Grt2bOutdoors » Fri Feb 17, 2012 9:20 pm

livesoft wrote:The fake bonds were not meant to be cashed in. They were meant to be sold to the Greater Fool.


Since these were found in the European Union, one can infer that Europeans are fools. :roll:
"Luck is not a strategy" Asking Portfolio Questions
Grt2bOutdoors
 
Posts: 10003
Joined: Thu Apr 05, 2007 9:20 pm
Location: New York

Re: Fake US Treasury Bond Arrests

Postby baw703916 » Fri Feb 17, 2012 11:41 pm

A little bit of googling finds that the national debt in 1934 was only $27 billion, an increase of $5 billion over the previous year. You figure that at most $10-$12 billion in Treasury bonds were issued in 1934. And 10% of it was in the form of a single piece of paper, which didn't turn up until recently...?
Most of my posts assume no behavioral errors.
User avatar
baw703916
 
Posts: 5590
Joined: Sun Apr 01, 2007 2:10 pm
Location: Northern Virginia

Re: Fake US Treasury Bond Arrests

Postby Call_Me_Op » Sat Feb 18, 2012 10:45 am

livesoft wrote:The fake bonds were not meant to be cashed in. They were meant to be sold to the Greater Fool.


That would be quite a fool.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
Call_Me_Op
 
Posts: 4636
Joined: Mon Sep 07, 2009 3:57 pm
Location: Milky Way

Re: Fake US Treasury Bond Arrests

Postby NAVigator » Sat Feb 18, 2012 10:51 am

baw703916 wrote:A little bit of googling finds that the national debt in 1934 was only $27 billion, an increase of $5 billion over the previous year. You figure that at most $10-$12 billion in Treasury bonds were issued in 1934. And 10% of it was in the form of a single piece of paper, which didn't turn up until recently...?

It seems these counterfeiters have more guts than brains. It's a good thing, because they got caught. I wonder how many with less ambition are wealthy and free.

Jerry
"I was born with nothing and I have most of it left."
User avatar
NAVigator
 
Posts: 2458
Joined: Tue Feb 27, 2007 8:24 am
Location: Iowa

Re: Fake US Treasury Bond Arrests

Postby Default User BR » Sun Feb 19, 2012 3:27 pm

NAVigator wrote:It seems these counterfeiters have more guts than brains.

Like the guy who tried to pass a million-dollar bill at Walmart. Even if the cashier was dumb enough to accept it as real, where would the store get $999,000+ in change?


Brian
Default User BR
 
Posts: 7503
Joined: Mon Dec 17, 2007 8:32 pm

Re: Fake US Treasury Bond Arrests

Postby magician » Tue Feb 21, 2012 11:16 am

Default User BR wrote:
chaz wrote:Diversify.

Make sure you get a variety of fake bonds?

Touché!
Simplify the complicated side; don't complify the simplicated side.
User avatar
magician
 
Posts: 1559
Joined: Mon May 02, 2011 2:08 am
Location: Yorba Linda, CA

Re: Fake US Treasury Bond Arrests

Postby magician » Tue Feb 21, 2012 11:18 am

GRT2BOUTDOORS wrote:
livesoft wrote:The fake bonds were not meant to be cashed in. They were meant to be sold to the Greater Fool.

Since these were found in the European Union, one can infer that Europeans are fools. :roll:

You can infer that someone expected to find fools amongst Europeans.
Simplify the complicated side; don't complify the simplicated side.
User avatar
magician
 
Posts: 1559
Joined: Mon May 02, 2011 2:08 am
Location: Yorba Linda, CA

Re: Fake US Treasury Bond Arrests

Postby magician » Tue Feb 21, 2012 11:23 am

Default User BR wrote:
NAVigator wrote:It seems these counterfeiters have more guts than brains.

Like the guy who tried to pass a million-dollar bill at Walmart. Even if the cashier was dumb enough to accept it as real, where would the store get $999,000+ in change?

Store credit.

(About 35 years ago I bought a bottle of Gatorade at a local supermarket at about midnight. All I had was a $100 bill, and the store policy was that they didn't accept anything larger than a $20 after 10:00PM for payment. However, the cashier came up with a solution: she could give me 5 $20s in exchange for the $100, then accept a $20 for the Gatorade. You might think that she was being clever, but the fact is that she honestly thought that giving me change for the $100, then accepting a $20 for the Gatorade was a materially different transaction than accepting the $100 for the Gatorade.)
Simplify the complicated side; don't complify the simplicated side.
User avatar
magician
 
Posts: 1559
Joined: Mon May 02, 2011 2:08 am
Location: Yorba Linda, CA

Re: Fake US Treasury Bond Arrests

Postby nisiprius » Tue Feb 21, 2012 11:39 am

magician wrote:(About 35 years ago I bought a bottle of Gatorade at a local supermarket at about midnight. All I had was a $100 bill, and the store policy was that they didn't accept anything larger than a $20 after 10:00PM for payment. However, the cashier came up with a solution: she could give me 5 $20s in exchange for the $100, then accept a $20 for the Gatorade. You might think that she was being clever, but the fact is that she honestly thought that giving me change for the $100, then accepting a $20 for the Gatorade was a materially different transaction than accepting the $100 for the Gatorade.)
Whoa! How big a bottle of Gatorade was that?
Image
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
nisiprius
Advisory Board
 
Posts: 25237
Joined: Thu Jul 26, 2007 10:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Fake US Treasury Bond Arrests

Postby magician » Tue Feb 21, 2012 12:02 pm

nisiprius wrote:Whoa! How big a bottle of Gatorade was that?
Image

LOL!

It was about $1.50.

Frankly, it was sad. I tried to tell her that it's the same thing ("You end up with my $100 bill, I end up with Gatorade and change.") but she was adamant: making change for a $100 is different from accepting the $100 for payment.

As the $100 wasn't counterfeit (as far as I know), all was well, but it was just sad to imagine the thought (?) process.
Simplify the complicated side; don't complify the simplicated side.
User avatar
magician
 
Posts: 1559
Joined: Mon May 02, 2011 2:08 am
Location: Yorba Linda, CA

Re: Fake US Treasury Bond Arrests

Postby ftobin » Tue Feb 21, 2012 2:30 pm

magician wrote:Frankly, it was sad. I tried to tell her that it's the same thing ("You end up with my $100 bill, I end up with Gatorade and change.") but she was adamant: making change for a $100 is different from accepting the $100 for payment.

While the end result is the largely the same, she might have been confused how to manage the register to perform your simple 2-step workaround in one step without messing up paperwork (working a shift at midnight does not help cognitive function!). Maybe the register wouldn't have allowed a 100-bill given as payment, but clearly didn't care about a bill swap (I have no idea about register capabilities 35 years ago).

I wonder if the same transaction would work today, without some sort of alert (either during- or post-transaction register checks -- "Where did this $100 bill come from?").
ftobin
 
Posts: 867
Joined: Fri Mar 20, 2009 4:28 pm

Re: Fake US Treasury Bond Arrests

Postby magician » Tue Feb 21, 2012 2:43 pm

ftobin wrote:
magician wrote:Frankly, it was sad. I tried to tell her that it's the same thing ("You end up with my $100 bill, I end up with Gatorade and change.") but she was adamant: making change for a $100 is different from accepting the $100 for payment.

While the end result is the largely the same, she might have been confused how to manage the register to perform your simple 2-step workaround in one step without messing up paperwork (working a shift at midnight does not help cognitive function!). Maybe the register wouldn't have allowed a 100-bill given as payment, but clearly didn't care about a bill swap (I have no idea about register capabilities 35 years ago).

To be clear, it wasn't my two-step workaround; it was hers, and it wasn't a workaround: it was a different (and perfectly OK) transaction. When she told me that she wasn't allowed to accept a $100 bill after 10:00PM, I would have been happy to put the Gatorade back on the shelf and leave. She came up with the idea of changing the bill, then ringing up the transaction, and her manner clearly betrayed that fact that she saw this as fundamentally different from accepting the $100 for payment. There was no technological hurdle here: it was essentially a manual register. It was the-rules-say-don't-take-a-large-bill-for-payment-but-they-don't-say-don't-make-change-for-it-and-that's-different.
Simplify the complicated side; don't complify the simplicated side.
User avatar
magician
 
Posts: 1559
Joined: Mon May 02, 2011 2:08 am
Location: Yorba Linda, CA

Re: Fake US Treasury Bond Arrests

Postby Kashi » Tue Feb 21, 2012 3:42 pm

magician wrote:To be clear, it wasn't my two-step workaround; it was hers, and it wasn't a workaround: it was a different (and perfectly OK) transaction. When she told me that she wasn't allowed to accept a $100 bill after 10:00PM, I would have been happy to put the Gatorade back on the shelf and leave. She came up with the idea of changing the bill, then ringing up the transaction, and her manner clearly betrayed that fact that she saw this as fundamentally different from accepting the $100 for payment. There was no technological hurdle here: it was essentially a manual register. It was the-rules-say-don't-take-a-large-bill-for-payment-but-they-don't-say-don't-make-change-for-it-and-that's-different.


It sounds to me like she is sharp, rather than dull. The store policy is the weak point in the series of events, not the cashier's logic or actions...imo.
User avatar
Kashi
 
Posts: 112
Joined: Wed Apr 28, 2010 5:58 pm


Return to Investing - Theory, News & General

Who is online

Users browsing this forum: FinancialDave, mrbry, tphp99, Yahoo [Bot] and 32 guests

cron