Wednesday, April 27, 2005

Just like Pagliacci did,
I try to keep my sadness hid.

The Chicago Tribune says:
Federal agents pinned decades of gangland killings on Chicago-area mobsters Monday, charging a dozen organized crime figures and two former police officers with running an outfit based on illegal gambling, loan sharking and murder....

Agents were still searching for two of those charged Monday night, including Joey "The Clown" Lombardo, 75, once the reputed boss of Chicago's mob.
The indictment says (in small part):
It was further part of the conspiracy that loans made at usurious rates, or “juice loans,” would be and were made to numerous individuals. These loans carried interest rates generally ranging from one percent (1%) to ten percent (10%) per week, which translate into annual rates of 52% to 520%, respectively.
Joey the Clown and his buddies were in the wrong business -- well, 41 pages of wrong businesses. They should have gotten into payday loans. These loans can carry APRs of 300% up past 900%. And they're legal.

Why do loansharks make less than legal lenders? This is a job for Freakonomics! I bet Joey's thinking
Really I'm sad
Hurtin' so bad


Blogger Tom Bozzo said...

Nice post. Actually, the indictment is wrong. The compound APR for 10% weekly interest is 14,104% -- 1.1 raised to the 52nd power (by the same calculation, 1% weekly interest has a 68% APR), less one. It would be interesting to know who would get stuck with those terms.

1:27 PM  

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