The 5 Dumbest Things on Wall Street This Week: Aug. 16
5. Holder Loses Grip
Hold on a second, Holder! We here at the Dumbest Lab are quite familiar with government agencies making massive data revisions. So much so, in fact, that we now wait an extra month to get monthly nonfarm payroll numbers we can believe in.
(Seriously Bureau of Labor Statistics? The economy added 162,000 jobs in July? Yeah, right! We'll see what you say in September!)
Nevertheless, hearing the FBI restate its figures, well, that is arresting indeed.
The Department of Justice said late last Friday that it had severely overstated the results of a year-long mortgage fraud initiative in a press conference last October. Attorney General Eric Holder originally said that the "Distressed Homeowner Initiative," a nationwide effort to target fraud schemes that preyed upon suffering homeowners, had resulted in 530 criminal charges. Holder added at the time that the cases involved over 73,000 borrowers with losses totaling $1 billion.
It turns out, however, that those numbers coming from President Obama's top cop were way, way off.
The number of criminal charges was actually 107, admitted the FBI after being pressed by our buddies at Bloomberg. Federal agencies also corrected victim's losses to $95 million from $1 billion and the number of victims to 17,185 from more than 73,000.
Somebody get Alanis Morrisette on the phone. Forget "rain on your wedding day," that's not ironic at all, it's just bad luck. If you want to talk irony, well, a prime example would be the point man for the Obama Administration's Mortgage Fraud Working Group publicly announcing fraudulent statistics!
Perhaps even sadder was the fact that these fearless crime-fighters tried to sneak out this correction late on a Friday to sidestep the news cycle. Um, excuse us, officers, but unlike the shady hedge fund managers and insider traders that you fail to put away, we journalists work full days during the summer. We don't jet out to the Hamptons at noon to beat traffic and bad PR.
"We cannot merely investigate after the fact," said FBI Associate Deputy Director Kevin Perkins last fall when the phony numbers were first announced. "We must use intelligence and sophisticated techniques to identify and stop those who seek to defraud American homeowners."
Hilariously, it turns out that the FBI didn't investigate after the fact at all. It left that to Bloomberg, which in turn left the agency looking far less than sophisticated and anything but intelligent.