Did no one think the price of taxi medallions was a bubble, a scam

Guess those bankers thawt 'They be neva go down'

http://www.crainsnewyork.com/articl...area-lender-shut-down-for-bad-medallion-loans

 

shrewd buyer.
previous article:http://www.crainsnewyork.com/articl...n-by-aspire-federal-credit-union-windels-marx

 

In many cases, the price of medallions was manipulated by government through supply controls and as such was higher than what the market would have settled on had the government not put such supply limitations in place. Whether that should be considered a scam is based on whether or not you believe government manipulating supply of a particular commodity is a scam.

Government limits supply of other commodities in various ways as well (see sugar import restrictions). Are they also scams? I don't see it as any different.

My opinion is it's a scam. Same as how my local city council keeps granting Comcast 10 year monopolies, but I'm a free market kind of guy.

 

I don't see this as a scam. When medallions were going for $800K each, yellow cabs were immensely profitable. Then along came Uber, and disrupted the entire industry. At the time the banks/credit unions made the loans, it looked like reasonable risk.

This could easily happen in other industries. For example, do you think residential real estate is a scam? No? Then let the government stop all immigration and you will see what happens to the price of homes. Without immigration the US population would decline by over one million per year.

 

your post would have been impressive if you had bought .... which is up 2.55 X.

 

Taxi industry was a scam

Scam busted

 

You could argue that maybe the lenders in question were a bit too greedy and didn't diversify their loan portfolios sufficiently, instead choosing to concentrate in something which looked, frankly, bulletproof at the time.

Speaking of medallions, this is a good story:
https://www.bloomberg.com/features/2015-taxi-medallion-king/

 

A great story. Hard to believe that at its peak, medallions went for $1.3 million.

 

Well they shouldn't have allowed for the reselling of the medallions in the first place. I always thought Taxi's permit should be like any other permits, professionally bestowed by the government upon passing certain criteria and when the taxi owner retires, his/her permit should be returned back to the government for the government to be reissued to the next taxi owner. His/her investment in the permit should've been more than well paid off by the revenues he/she's earned throughout his/her business as a taxi driver. WHY should he/she be allowed to resell the medallion? That belongs to the government.

 

That's why it was a scam. ala Bitcoin

Let a bunch of mobsters run up the price, then get banks to loan against it, boom , money gone