Tale of a Global Economic Catastrophe

I knew well and good what generally happened when politicians and central bankers got their hands on soft money and a compliant central banker. They used their control of the money to cheat people.

Sir Allan Greenspan

Prologue

In the fall of 2011 the entire globe was besieged by imminent economic collapse. The economy of entire countries was being decimated. The Euro itself was in danger of disappearing.

Austerity was no longer just a word buried inside lexicons. It described a way of life for many living in a country, county, or city buried in debt. Food and commodity costs rapidly escalated. Hunger, despair, rising unemployment, and poverty ensued. Riots erupted. Banks foreclosed in record numbers. People evicted from their homes popped into canvas covered shacks in tent cities only too see their former homes fall into vacancy, a state of ill repair, browning lawns, and rat infestations.

As I write this the ECB is massively over leveraged. A small decline in the value of their assets could wipe out their entire capital base. German banks are leveraged 32:1. Over leverage in the British, and US banking systems are not far behind. Solvency of many of the largest banks in the world is being questioned. Can they survive? Will they survive?

There is a lull before the storm, but dark clouds are gathering.

***

What happened? How did we get here?

It started with a simple goal of an American President to establish policies that could allow every American citizen to achieve the ultimate dream of home ownership. What happened? How could the American dream turn into an American nightmare?

In 2011 the situation became so desperate an acronym was created to designate the countries first noticed to be most at risk of collapsing. “PIIGS”: Portugal,Ireland,Italy,Greece, and Spain. They were not the only countries in danger. Indeed Germany, France, England and even the United States were gripped by surging debt and a collapsing banking system. Problems were systemic.

In many ways this is tale of a lack of confidence; a tale of lies, lies, and more lies; a tale of immense debt; a tale of corporate greed; a tale of regulatory capture; and a tale of corruption.

“The evidence indicates that operating earnings for the Standard & Poor’s 500 have been significantly exaggerated for nearly two decades.”

Bull! – on Fully Deluded Earnings

***

“The market is nervous because everyone feels like they are being lied to.”

Janet Tavakoli Aug 3, 2007

***

It was all a confidence game. Like snake oil salesman Wall Street gained the confidence of their clients and then abused them – draining them of their savings, of their credit, of their homes, – and even of their dreams!

“Lure people into the calm and then just totally f*** ‘em”.

A Banker’s Trust Employee – Simon Johnson, 13 Bankers

***

Goldman Sachs was founded in 1869. The company stated it had one goal in mind – to do best by it’s customers. Was it too lofty a goal, an altruistic euphemism; or perhaps a simple and direct statement of intentional hypocrisy used to gain the confidence of their customers while robbing them blind?

In 1980 the Savings and Loan (S&L) industry collapsed. Cost to the Federal Savings and Loan Insurance Corporation exceeded $160 billion. Cause of their collapse was linked largely to lax regulation, fraud, escalating interest rates, and thrifts taking on large volumes of risky real estate assets. At a time of double digit interest rates money was being loaned to borrowers without the prudence of making sure the borrowers were capable of paying back their loans. The elimination of regulations allowed an exponential increase in fraud and insider transaction abuses. Thrifts were abused for political purposes. A coined phrase, “The Keating 5” referred to 5 U.S. senators accused of influence peddling for personal and/or political gain. Billions of dollars from Keating’s Lincoln Savings & Loan were found to be mysteriously missing. In 1989 a “Resulution Trust” was created to wind down “bad assets” from the S&L crisis. A steady stream of prosecutions followed for various crimes committed during the S&L crisis.

In 1989 the bankrupted FSLIC (Federal Savings & Loan Insurance Corporation) was replaced the FDIC (Federal Deposit Insurance Corporation) and the OTS (Office of Thrift Supervision).

Many insolvent S&Ls were not shut down in a timely fashion due to a lack of funds in the RTC. The same problem may be occurring in 2010-2012 as the FDIC itself is no longer solvent and is totally reliant on the U.S. Treasury for funding.

***

The Rise and Fall of LTCM

Subsequently major Wall Street investment banks were in danger of collapse. Goldman Sachs, Merrill Lynch, JP Morgan, Morgan Stanley, Bear Stearns, and Lehman were all in danger of failing. The year was not 2011. No, not 2008 or 2007. The year was 1998! Long Term Capital Management (LTCM) was about to file for bankruptcy. At the time of it’s failure it was using 50:1 leverage. LTCM had 50 times debt (borrowing) over asset values. With such immense leverage a single bad trade could decimate the fortunes of LTCM.

LTCM made much of its fortune trading derivatives.

Prior to th LTCM debacle; to gain some degree of complacency in 1985 major banks created the ISDA: International Swaps Dealers Association to formulate rules to clear swaps. In reality the ISDA was not an external regulatory agency – it was a self regulatory agency. The ISDA did not have a handle on the size of derivatives in 1998 – or perhaps they just lied. When asked about the size they indicated it might be $100 billion. They were missing a few zeros, as by 1998 the value of derivatives traded among a few banks was already in excess of $100 trillion! Today the excess in notional derivatives value exceeds $700 trillion.

Brooksly Born, head of the CFTC, recognized the danger of derivatives and wanted them to be tightly regulated. Monied interests in Wallstreet considered the danger not to be in derivatives trading, but instead in Brooksly Born, the person. The monied interests gathered political favors and forced Born out of office.

LTCM felt comfortable in being able to profit from the trading of derivatives. They had a concept to make only “safe” bets that were based on information gathered by their wide base of contacts spread across every government sector; and from information gathered via lucrative consulting contracts to help set government regulations. Thus they could trade on changes in regulations they would know days, weeks, and even months before other traders. They had a term for the “edge” this gave them in their trading activities; and they did not hesitate to use it when pitching to investors. The term was “Regulatory Arbitrage”.

In 1998 LTCM was felled by a bad bet in interest-rate swaps and Russian currency trades. A classic run on the bank and subsequent massive losses in long-dated stock options on French and German indices ensured their demise. An appeal by the FED was made to Warren Buffet to bail out LTCM, but Berkshire would have no part of it. When they sought Warren’s help the FED may have been unaware LTCM had shorted Berkshire Hathaway’s stock.

LTCM thought it ensured success and extraordinary profits by only placing safe bets based on their use of “Regulatory Arbitrage”. In reality their use of immense leverage kept them only a few bad trades away from self detonation.

Treasury Secretary Robert Rubin opined

“The world is experiencing its worst financial crisis in half a century”.

The FED gathered bankers into the room and insisted they work out a solution among themselves. By Partnoy’s account the FED could offer no support itself, other than “cookies and a meeting room.”. The bankers, with the sole exception of Bear Stearn’s James Cayne, ended their meeting by offering LTCM low interest loans tallying $3.6 billion in return for a 90 percent stake, vowing never to be put into the same position again. The lack of compliance by Bear Stearns was not lost on Jamie Dimon at JP Morgan. Almost three years thereafter LTCM was dissolved. It was the end of LTCM, but Wall Street survived.

Some should be rightfully skeptical of Partnoy’s portrayal of the FED providing only “cookies and a meeting room” as support to LTCM. Standard Operating Procedure at the FED is to at least provide a guaranty against loss for the value of 90% of assets. The level of assets given such a guaranty is negotiable, but being poor negotiators the FED typically allows the guarantee to write in the level, which tends to be a huge number! A guaranty of this nature was provided in the bailouts of Countrywide, Bear Stearns, and Merrill Lynch.

When the banks negotiated a buy into their 90% stake of LTCM in 1998 for $3.6 billion LTCM held $130 billion in debts and $1.4 trillion in open derivative positions. Was it realistically possible for LTCM to unwind those positions in less than three years without a FED support?

(For extensive details on the tale of Long Term Capital Management; a danger to Wall Street; and the failure of corporate empires read Frank Partnoy’s complaint: ‘Infectious Greed’).

***

In the same year as the beginning of the collapse of LTCM, 1998, Citigroup and Travelers merged. It was a violation of Glass-Steagall. Instead of forcing Citigroup to follow the law and breaking up their merger, Glass-Steagall was repealed.

The Collapse of Enron

“The United States can destroy you by dropping bombs, and Moody’s can destroy you by downgrading your bonds. And believe me, it’s not clear sometimes who’s more powerful.”

– Thomas Friedman.

Infectious Greed – Page 64

In 2002 another crisis erupted with the failing of several major corporations – most notably Enron and WorldCom. Astoundingly Enron was found to be directly involved in multiple fraudulent activities not discovered until after a sharp decline in their stock price. ENRON was a small but successful natural gas pipeline company that transformed into a massively successful publicly traded derivatives trading company – trading energy derivatives. Their most notable crime was hiding massive debt in off-balance sheet “special purpose entities / vehicles” bearing names of popular Star-Wars characters. Being off-balance sheet no one recognized that the company was drenched in debt while reporting ever increasing profits. Top executives off loaded their own shares near the top of the market even while holding employee rallies informing their 25,000 employees ENRON was a great investment vehicle for all of their hard earned pay checks. Financial success at ENRON was so firmly established their CFO, Andrew Fastow, was awarded CFO of the Year by CFO magazine.

Star Wars references in the complex array of Enron’s Special Purpose Entities (SPEs) become less surprising once you become aware of Enron’s corporation to hide the debts was created as the “Joint Energy Development Investment” Corporation, or “JEDI”. The joint partner in JEDI was CALPERS – The California Public Employee Retirement System. JEDI was largely funded by unsecured loan with Barclays. A number of SPEs were named “Raptors” and used to hide mounting mark-to-market losses.

Whenever rumors of real losses at Enron vibrated across the Internet Jeffrey Skilling issued a formal press release of denials, half-truths, and falsities. In November of 2000 Skilling stated “Rumors of a potential profit warning are not true.”. In January and March of 2001 Skilling issued press releases stating “Confidence for Strong Business Prospects in 2001”. He later announced being comfortable with targets set for 2001. In July of 2001 Skilling announced “Renewed confidence in their prospects for 2001”.

Enron used regulatory capture as a tool to drive its share price and to give Enron an edge for successful derivatives trading. The president considered Ken Lay to be a close and personal friend. Sons George W Bush, Neil Bush, and Marvin Bush acted on behalf of Enron in Kuwait and Argentina. Enron employees included former cabinet ministers James Baker and Robert Mosbacher. A steady stream of contributions flowed to the Senate Banking Committee from Enron. Senate Banking Committee member Phil Gramm’s wife Wendy Gramm sat on Enron’s board. Wendy Gramm was instrumental in deregulating swaps. Jeffrey Skilling served as a director of the Federal Reserve Bank of Dallas while also CEO at Enron. Lord John Wakeham, former leader of the British House of Commons served both as a Consultant to Enron and as an Enron board member at the same time. Enron Director Frank Wisner was formerly US Ambassador to India, and previously the US Ambassador to the Philipines. Robert Zoellick was on Enron’s Advisor council. White House Economic Advisor Larry Lindsey served as a consultant to Enron. After things went badly awry Enron hired the former head of the SEC’s enforcement division.

Other people with close ties to Enron include Dick Cheney, Karl Rove, John Ashcroft, Patrick H Wood III, Harvey Pitt, Spencer Abraham, and Marc Racicot.

***

Enron implodes in a wave of Accounting Scandals

In August of 2001 Sherron Watkins informed management: “We will implode in a wave of accounting scandals.” Management responded by hiring a third party (Vinson & Elkins) to perform a non-independent audit of their financing. The whitewash of the biased audit was successful … but only until real numbers had to be reported due to a lack of cash and a need to meet their off-balance sheet debt obligations. On October 25, 2001 Enron drew down $3 billion dollars of their credit line to pay off debt obligations and increase their dried out cash level.

I’d like to say the rest is history, but it’s not. Numerous intriguing trades about Enron remain to be told. Tales of Nigerian barges used to book false profits. Tales of bribery of low level employees at El Paso Electric by Enron traders asking them to turn off power for hours at a time to manipulate derivative trading of energy prices; evidenced by physical audio tapes. No fewer than 38 energy blackouts in California have been attributed to the same form of manipulation. There was never an actual shortage of power in California. Tales of Round-Trip wash trades with foreign national banks to manipulate Enron stock prices. Tales of Skillings” “Put” option trading in a close competitor using insider knowledge of contracts between the two companies. Tales of insiders artificially boosting the price of Enron stock. So much fraud, discovered only after the downfall of Enron! Tales of ENRON structuring several of their SPEs named “Talon” and “Timberwolf” to illicitly purchase Put Options … on Enron’s own stock! It was an option betting Enron’s stock price would decline substantially.

Enron was not satisfied with making it’s derivatives profits solely from an edge it might have via “regulatory arbitrage”. They wanted to have a “sure thing”. They guaranteed profits made in the trading of California energy contracts … by causing a series of “rolling blackouts”, uncovered in audio tape recordings of their traders.

A utility says an Enron employee and a worker at a power plant in Las Vegas, Nevada, made up phony repairs, taking the plant off-line January 17, 2001.

“We want you guys to get a little creative … and come up with a reason to go down,” the Enron worker tells the plant employee on one of the tapes.

“Anything you want to do over there? … Cleaning, anything like that?” the Enron employee says.

“Yeah, yeah,” the other replies. “There’s some stuff we could be doing.”

Earlier tapes obtained during the Enron-Snohomish lawsuit indicated Enron had manipulated the Western power grid for a year and a half.

Those tapes include traders gloating profanely about overcharging “Grandma Millie” in California.

In one January 2001 telephone tape of an Enron trader the public utility identified as Bill Williams and a Las Vegas energy official identified only as Rich, an agreement was made to shut down a power plant providing energy toCalifornia. The shutdown was set for an afternoon of peak energy demand.

“This is going to be a word-of-mouth kind of thing,” Mr. Williams says on the tape. “We want you guys to get a little creative and come up with a reason to go down.” After agreeing to take the plant down, the Nevada official questioned the reason. “O.K., so we’re just coming down for some maintenance, like a forced outage type of thing?” Rich asks. “And that’s cool?”

“Hopefully,” Mr. Williams says, before both men laugh.

“They’re f——g taking all the money back from you guys?” complains an Enron employee on the tapes. “All the money you guys stole from those poor grandmothers in California?”

“Yeah, grandma Millie, man”

“Yeah, now she wants her f——g money back for all the power you’ve charged right up, jammed right up her a—— for f——g $250 a megawatt hour.”
..

Memos uncovered by Snohomish County show that Enron rewarded midlevel executives based on their performance in manipulating the West Coast market.

Listen in to a CBS broadcast, Dec 5 – 2007. Please make sure not to be eating or imbibing anything before clicking on the link:

http://www.cbsnews.com/stories/2004/06/01/eveningnews/main620626.shtml.

“He just f—s California,” says one Enron employee. “He steals money from California to the tune of about a million.”

“Will you rephrase that?” asks a second employee.

“OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day,” replies the first.

In the aftermath of the Enron scandal four Merrill Lynch were criminally charged for their roles in the sale of Nigerian barges. As a company ML settled for $80 million. Citigroup and JP Morgan Chase settled for a total of $255 million for their respective roles. Sarbanes-Oxley was put into effect to deter future grievances, but as no one was ever charged for a Sarbanes violation it failed to serve its intended purpose.

“Many of Enron’s loans had credit-rating triggers, so that even though payment might not be due on its debt for several years, the terms of the debt specified that payments would be accelerated, following a downgrade below investment grade.”

Infectious Greed – Page 334

***

By reporting low debt levels Enron was able to consistently maintain AAA investment grade ratings. When Enron was no longer considered solvent by Moody’s one of their bankers, Dick Fuld of Lehman Brothers, implored Moody’s to maintain at least a minimum investment grade. Viewing Enron as a substantive income source Moody’s maintained Enron at investment grade for an additional ten days, allowing Lehman and other bankers to unload their Enron assets at higher prices than they would have otherwise achieved in the open market. At the time of Fuld’s pleading Enron was completing the purchase of Dynegy. The intended Dynegy purchase was used by Moody’s to validate their decision not to lower Enron’s ratings.

It’s difficult to know if Enron’s investment banks made or lost money after the warning of a possible downgrade. However at a 15 times multiple between the price at the time of the warning ($9.60) and the price after the downgrade below investment grade was applied ($.60), the banks stood much to gain by churning and selling Enron stock short while knowing with absolute certainty the value of the stock to be worthless and having knowledge the downgrade would ultimately be issued two weeks later.,

Legitimacy of Enron’s balance sheet was dubious at best. To have legitimacy they needed to have ownership by some fully independent party. SPEs must be designed for specific legitimate purpose. Deceit and opaqueness to hide debt from their investors are not among reasons of legitimate purpose. Even if legitimate, a conflict of interest with Fastow as Enron’s CFO and partner in several of Enron’s SPE’s was clear. A number of specific transactions between Enron and the SPEs could readily be recognized as fraud by any jury. Not only were bad assets moved off balance sheet into SPEs, but documents were frequently and fraudulently back-dated by Fastow when moved into SPEs. Side agreements termed “Global Galactic” were drafted and signed to further manipulate Enron earnings.

Many side deals between SPEs and Enron were “oral”. Commitments to these “oral” agreements were honored, but being “oral” only were never disclosed to Enron shareholders. For example a commitment to buy back LJM’s interest in the CUIEBA project if necessary to make LJM profitable.

Side deals between LJM and Enron were ALWAYS designed to make LJM profitable. In a sense of bizarre satire LJM was a corporate partnership named after Fastow’s wife and children! The punch-line was well known by all of Enron’s executives, although held secretive to the public.

***

Surprisingly it was not unusual to have “oral” side deals with Enron’s Investment Banks. Enron held an “oral” only side deal with Merrill Lynch (ML) guaranteeing profits to ML for power generating barges parked off the coast of Nigeria.

Many Enron high level executives recognized the conflict of interest Andrew Fastow had as both their CFO and partner in the SPEs’. They brought the matter of conflict to management, but Ken Lay supported Fastow.

Needless to say “Vinson & Elkins” were found to be directly involved in structuring many of the transactions they were asked to independently audit. It was as unlikely to reveal fraud at Enron as would have been asking their main auditors, Arthur Anderson, to perform an “independent” audit.

Jeffrey Skilling and Richard Causey were successfully convicted of Insider Trading which included a charge of “Manufacturing Earnings by Fraudulently Manipulating Asset Values”.

In his detailed account “Infectious Greed” Frank Partnoy insists none of Enron’s actions were illicit. Juries decided otherwise. Juries might not understand the intricate details of “Special Purpose Entities”, but deceitful remarks recorded at Investor Conferences; falsities included in SEC regulatory filings; actual trading records; and admitted oral contracts between Enron and Fastow’s LJM corporation ensuring profits to LJM at the expense of Enron were easy for a jury to understand.

Ken Lay informed his board all transactions with LJM were to Enron’s benefit. Testimony indicated otherwise, and Fastow himself admitted to having an oral agreement with Enron that all transactions would benefit LJM.

A Wave of Indictments

No executives; or employees at Long Term Capital Management (LTCM) were either charged or indicted for fraud.

CEO Jeffrey Skilling was found guilty on 19 counts, including insider trading; and was sentenced to 24 years. Ken Lay was found guilty on 6 counts of conspiracy and fraud; and later committed suicide. Neither Skilling or Lay admitted to guilt either before or after sentencing. Ken Lay’s wife gained public sympathy after declaring she and her husband lost everything, including their first and second homes. The sympathy was short lived after the public learned she still held ownership to ten other palatial residences. Cliff Baxter was found in the back of his car with a gunshot wound to the head and a suicide note. It was ruled a suicide. Some conspiracy theorists; among them two law enforcement officers; prefer to call it murder. He was not charged with a crime, but had been scheduled to appear as a witness. Richard Causey was found guilty of a single count of conspiracy and fraud after agreeing to testify against Skilling and Lay. Michael Kopper was given a 3 year sentence for his role in the LJM transactions. CFO Andrew Fastow entered into a plea agreement admitting to two counts of fraud and conspiracy, and was assigned a 10 year sentence.

Canadian firm Bre-X was found guilty in 1995 of salting gold mines to boost the price of their shares.

Bernie Ebbers; founder of Worldcom; received a 25 year sentence for fraud and conspiracy. CFO Scott Sullivan made a plea agreement and in exchange received a 5 year sentence.

Adelphia founder John Rigas was sentenced to 15 years for defrauding Adelphia. His son and CFO Timothy Rigas was sentenced to 20 years. Their primary crime was mistakenly treating the riches of public company Adelphia as if they were the riches of a private company. Three other Adelphia officers were indicted for fraud.

Qwest founder Joseph Nacchio was found guilty of 19 counts of insider trading and received a 6 year sentence.

Accounting firm Arthur Andersen was forced into bankruptcy, but a consultancy segment was spun off as Accenture.

In 2005 Healthsouth’s CEO Richard Scrushy was indicted and tried on charges of inflating Healthsouth’s earning; but was acquitted of all charges by a jury. Scrushy was subsequently indicted, tried, and found guilty on charges of bribery.

Refco collapsed in October of 2005. It was a vast trading company with over $4 billion in 200,000 customer trading accounts – Hillary Clinton having one of them. Refco is where Hillary made a miraculous but small fortune trading Cattle Futures. Hillary was so adept at trading she rapidly turned an initial investment of $1,000 into $100,000 in a series of successful transactions. Like LTCM and Enron Refco had immense earnings growth showering investors with vast profits. Ultimately their growth could be tied to FAKE trading tickets and FAKE bonds! The Refco scam would take years and a wave of trial cases to resolve. Several executives were indicted. CEO Phillip Bennett was accused of orchestrating a criminal conspiracy and hiding over $720 million in personal debt. Chicago lawyer Joseph Collins was indicted for legal work performed on behalf of Refco. Refco owner Tone N Grant and CFO Robert C Trosten were charged with bank fraud and money laundering. CEO Phillip Bennett plead guilty and was assigned a sentence of 16 years. Lawyer Joeseph Collins was found guilty and sentenced to 7 years after a nine week trial. Although the term “Repo 105” would not be known until after the collapse of Lehman, essentially Collins crime was his work in hiding Refco debt by building “Repo 105” like transactions.

‘

Hillary Clinton lied about her precocious futures trades. She stated that she learned the ins and outs of trading futures by reading the Wall Street journal. In actuality she had futures trader James Blair place and manage trades on her behalf. Wanting to please the governor and his wife Blair had the trades placed by Refco trader Robert “Red” Bone. It was understood by “Red” that Hillary’s trades could only be profitable ones. That was easily accomplished by marking trade tickets at the end of each day so that another client’s winning trade was assigned to Hillary; and Hillary’s losing trades assigned to other clients randomly – wiping out their profits; and potentially their entire life savings.

There is an alternative theory regarding Hillary’s trading fortunes using her Refco account, although I believe the above account of assigning only profitable trades by “Red”‘s marking trading tickets at the end of the day is the most likely correct. The alternative their is that Hillary did not make a single deposit of $1,000 into the account, but instead made various deposits and that her trading account was at times deeply in the red; but was ultimately liquidated at a profit of $60,000 above her original investments. According to this accounting of her trades the times when her account were deeply in the red would have resulted in a margin call forcing liquidation of the account … if the account had been held by any trader other than Hillary!

A too oft heard story. A “tall tale” perhaps(?):

Blair, who at the time was outside counsel to Tyson Foods Inc., Arkansas’ largest employer, says he was advising Clinton out of friendship, not to seek political gain for his state-regulated client. At the time of many of the trades, Bill Clinton was governor.

Deutchse Bank admitted to acts of covert espionage between 2001 and 2007. Investigations regarding the acts of espionage remain open, but results are kept largely secret. Deutsche Bank is now embroiled in multiple investigations of their CDO trading activities.

In 2008 Siemens admitted to the use of bribery in their having been awarded contracts for the 2004 Summer Olympic Games in Athens.

Clear Stream Banking S.A. has been embroiled in ongoing investigations and accusations of securities fraud and kickbacks to politicians that commenced in 2000. Their primary business is to serve as the primary international clearing house for securities trading.

Halliburton’s former CEO, Dick Cheney was accused of corruption by the Nigerian Government in December of 2010. in relation to a $182 million contract at Bonny Island. In 2009 subsidiary KBR admitted to having bribed Nigerian officials and settled for $407 million to Nigeria, and an additional $177 million to the US SEC. Investigations continue with respect to Halliburton’s role in the BP / Transocean Deepwater First Horizon incident.

***

Enron’s counterparties learned many lessons from their experiences with Enron. Unfortunately, for the rest of the world, they were lessons in how to hide mountains of debt off their balance sheets.

Few would know until Countrywide showed the first signs of stress that the “Housing Bubble” inspired by the vision of Alan Greenspan and high level politicians had popped. While many would recognize the bubble had popped, it would be many months before more than a small handful of people would link the cause to excessive greed and corruption.

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The Beginning of the End

In 2011 Standard & Poor’s has taken the action of downgrading the US Credit Rating from AAA Watch Negative to AA Watch Negative. Many view the action as an insult. Instead the US rating remains highly over rated. Was this the beginning of the end?

It was not a set of law suits that caused the collapse of the global financial system in the fall of 2011. It was dishonesty, deceit, larceny, corruption, and regulatory capture that left major financial firms awash in debt; alienated retail customers; alienated commercial customers, and alienated investors.

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Next up – Chapter 1: Early Warning Signs

http://twainsthoughts.com/gec/early-warning-signs/