Ingenious fraud

I just got a SMS from 503-929-3160 with the text

WELLS FARGO ALERT: Your ATM CARD has been DEACTIVATED. Please contact us at: 650-550-9255.

There were 2 tip-offs that this was a fraud: first, the stereotypical use of unnecessary capitalization and, second, the fact that I don't have an account with Wells Fargo.

Out of curiosity, I called the number to be greeted with an automated voice claiming to be the Wells Fargo card activation line and asking me to enter my 16 digit card number. I entered a bogus card number (sixteens ones) and was promptly cut off. Rumor has it that if you enter something with a valid check digit that the automated service will then prompt for your PIN number and then proceed to drain your account empty.

The ingenious part of this scam is that it relies on the fact that there is no way to authenticate who sent a SMS. With online phishing attacks you can look at the URL to confirm that you are dealing with the entity that you expect. In addition, banks and other high-profile web sites get Extended Verification Certificates for their websites to help make it more clear when you are interacting with the real thing. But there is no such thing for text messages: you just see a phone number. How many people know the phone number of their bank and/or have entered it into their phone's address book?

With services like Twilio making it trivial for ne'er-do-wells to extend their phishing attacks out of cyberspace into telephony, I suspect we'll be seeing more of these types of fraud attempts in the future. Of course, savvy people will never trust random text messages, but that still leaves a huge potential target for increasingly sophisticated fraud. God knows I hope my mother doesn't get one of these texts.

Introducing Jamie

Born 4:30am this morning at 20 inches long and 9 pounds. Both he and Mom are doing fine.

The "Keep Houses Unaffordable" Initiative

In a misguided attempt to prop up the "values" of homes, the Federal Government is giving free money to people who bought houses they couldn't afford by extending low- or zero-interest loans with an option to not repay the loan. There are two separate programs: the HUD Emergency Homeowners' Loan Program and the Treasury's Hardest Hit Fund.

As a responsible family that did not overextend ourselves to by a house that we couldn't afford, this is just a slap in the face. I don't begrudge people who bought homes and have now fallen on hard times...although the possibility of job-loss is supposed to factor into the calculation of how much house you can afford. No, I'm irritated because these programs are feel-good attempts to prop up the still-overpriced housing market so that banks don't have to recognize the true value of their mortgage-backed assets. You see, as a lender, banks should care about the borrowers ability to repay. So long as the government is willing to step in and pay when borrowers can't, it just reinforces bad lending practices.

Meanwhile, keeping home prices high is in no way good for us little people. It doesn't help people to have the burden of a home they can't afford hanging like an albatross around their necks. It doesn't help young families (such as my own) buy their first home...in fact, it actively obstructs that. Unless income rises to the point that homes are no longer ridiculously overpriced, which -- with real wages falling for 40 years -- doesn't seem likely, it does nothing to make homes more affordable. And affordability is the real problem with the housing market.

The Robber Barons of the 21st Century

I guess this is old news for subscribers of Rolling Stone, but I just ran across this excellent article they published in 2009 regarding the role the Goldman Sachs plays in the U.S. economy. In contrast to the random sound bites that fill so much of our media, it is well-researched article that it well worth the long read. Here is a link directly to the print version so you don't have to click through the 8 pages.

If, after reading that article, you are left with any doubt regarding Goldman Sachs' rigging of the U.S. economy in favor of themselves (not even their investors...just the bankers!), here is a current article from the Wall Street Journal chronicling their manipulation of the aluminum commodities market.

Folks, deregulation has gone too far. Over the last 25 years, Goldman Sachs has spearheaded the dismantling of the protections put in place in the wake of the Great Depression and look where it has gotten us.

Update 2011/07/04:

The Wall Street Journal has replaced their article with a partial snippet. Here are a few more articles on Goldman Sachs' manipulation of the aluminum commodities market.

I can haz free house?

In case anyone was wondering, I'd like a free house. Shoot, I'm not greedy, I'd settle for just not paying rent for a couple of years. Oh, and some free money too. Thanks!

Personal Exemption

As part of my research while implementing my mortgage estimator I discovered that, in addition to the standard deduction, the federal income tax code includes a personal exemption. Together, these two are intended to prevent subsistence-level income from being taxed. In other words, Congress intended to shelter the lowest rungs of society from taxation.

Now, obviously, the richer you get the less you need the personal exemption...when you make $200,000/year there is no risk of not being able to afford to eat. Accordingly, the IRS phased-out the amount of the personal exemption one could claim on their federal taxes as their income increased. For example, in 2009, the personal exemption was $3,650 but, for couples filing jointly whose adjusted gross income exceeded $372,700 the personal exemption was reduced to $2,433.

It is only a $1,217 difference, which at the maximum marginal tax rate would only amount to a little over $400 per person. Hardly a drop in the bucket for a couple making $372,700/year.

But the personal exemption phaseout was eliminated under President Bush's 2001 tax reforms...effective 2010. Besides ignoring the intent of the personal exemption, were the richest 1% of Americans really hurting for $400?

Fortunately, this is one tax cut for the rich that won't be sticking around: the budget proposals for 2011 restore the personal exemption phaseout. I hope they spent their one-time $400 windfall wisely.

It is hard being rich

As Republican Representative Sean Duffy reminds us, it is hard to live on almost 200 grand a year:


I guess that is why the ultra-rich need to pay a lower tax rate than the rest of us...it must be tough at the top.