Why We Trust Fraudsters!

Patrick Boyle On Finance

Patrick Boyle

Investing, Business

4.9 • 320 Ratings

🗓️ 10 December 2022

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

Send us a textFrom Enron to Wirecard to Theranos and FTX, elaborate investment scams can remain undetected long after the warning signs appear. What are investors missing?Patrick's Books:Statistics For The Trading Floor: https://amzn.to/3eerLA0Derivatives For The Trading Floor: https://amzn.to/3cjsyPFCorporate Finance: https://amzn.to/3fn3rvCPatreon Page: https://www.patreon.com/PatrickBoyleOnFinanceVisit our website: www.onfinance.orgFollow Patrick on Twitter Here: https://...

Transcript

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0:00.0	Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.
0:27.1	In 1925, Victor Lustig was staying in Paris and noticed a newspaper article discussing the
0:34.5	expense associated with maintaining the Eiffel Tower. The tower had originally
0:39.7	been built as the centrepiece of the 1889 World's Fair, and Eiffel originally only had
0:46.6	a permit for it to stand for 20 years. It was supposed to have been dismantled in 1909. In fact,
0:53.8	it was designed so that it could be quickly
0:56.1	taken apart. But the tower had been allowed to remain after the permit's expiration.
1:02.9	By 1925 the monument had fallen into disrepair and the city was finding it increasingly
1:09.0	expensive to maintain. The news article that Lustig
1:12.7	read suggested that public opinion on the monument would soon move towards calls for its removal.
1:19.3	This sparked the idea in Lustig's mind that he could use the Eiffel Tower for his greatest con.
1:25.8	Lustig set to work first hiring a forger to produce fake government stationery for him,
1:32.3	and then invited a group of scrap metal dealers to a secret meeting.
1:36.3	He introduced himself as the Deputy Director General of the French Ministry of Posts and Telegraphs.
1:43.3	He explained to the men that due to the high maintenance
1:47.0	costs, the French government were selling the tower for scrap, but that the deal had to be
1:52.9	kept quiet to prevent a public outcry. Lustig explained that he was in charge of selecting
1:59.7	the scrap metal dealer who would buy and
2:02.4	dismantle the structure, and that the group had been selected carefully because of their
2:07.6	reputations as honest businessman. The government had made this decision, he explained, after
2:14.4	careful consideration of the costs and due to the simple fact that the
2:19.3	structure performed no function and didn't fit in with the city's other great monuments.
	...

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