How Does Money Laundering Work?

You’re likely familiar with money laundering as a concept from your favorite TV show or the news. Whether it’s Walter White legitimizing meth money via a carwash or Al Capone using literal laundromats to clean his cash (that’s where the term reportedly originated, in fact), it’s the stuff of pop culture and criminal legends.

But it turns out it’s not an activity restricted to gangs or white collar criminals. It’s a lot more common than that.

Anyone, in theory, can launder money, and plenty do. In fact, between $800 billion and $2 trillion—two to five percent of global GDP—is laundered each year, according to the United Nations Office on Drugs and Crime. read more »

Six economic reasons to hate Uber

Many economists love Uber. They look at the quasi-taxi company’s aggressive disruption of local monopolies as a case study in the power and wonder of free markets. They could hardly be more wrong.

The theoretical appeal seems irresistible. Every one of the 40 distinguished economists who answered a 2014 survey from the University of Chicago’s Initiative on Global Markets agreed that consumer welfare was increased when “car services such as Uber or Lyft compete with taxi firms on equal footing regarding genuine safety and insurance requirements”. They were far too kind. The business model of Uber, the undisputed global market leader in this business, contravenes the wisdom of no less than six different types of economists.

The enthusiastic generalists come first, because Uber does not compete on their desired equal footing. Indeed, in the four years since the poll was taken it has turned into a zombie company. Without optimistic investors pumping in cash it could not stay in business for long, not with losses amounting to 7.4 percent of total bookings in the second quarter of this year, ignoring the fiction that payments received but passed to drivers are not revenue. read more »

Malaysia Corruption Scandal: Disgraced Former Prime Minister Faces More Charges In Billion-Dollar Embezzlement Probe

Former Malaysian Prime Minister Najib Razak is facing yet more criminal charges relating to a billion-dollar investment scandal in which he was allegedly involved while in office.

This third round of serious charges is part of a shocking fall from grace for the Najib, 65, who in the space of a few months went from Malaysia’s most powerful man to its most notorious alleged criminal.

Najib was charged with six counts of criminal breach of trust at a Kuala Lumpur court on Thursday. The indictments are related to the 1MDB corruption scandal, in which around $1.59 billion worth of government funds were allegedly used for illegal means read more »