The Financial Crisis Timeline Financial Scandals The largest section, Classic Financial and Corporate Scandals, in the collection of links above, includes the best known cases of recent years, e.g. Parmalat, Enron, Barings Bank, BCCI, BRE-X, etc. and some other very large ones that have received less publicity. In addition there are sections on related topics such as political corruption, money laundering, organised crime, official regulatory and anti-fraud organisations, other bodies fighting fraud, and financial scandals in fiction. That section is about the work of my sister, the novelist and former banker Linda Davies. Among the links from that page is one to a set of pages on the financial crime genre in general. Disclaimer The Financial Scandals site contains links to sources of information on various frauds, scams, swindles or corporate scandals in banking, finance and related areas, and on corruption involving governments and business.
The Largest Heist in History October - December 2008 When the financial crisis erupted at the end of September 2008, there was an unusual sense of incredible panic among banking executives and government officials. These two establishment groups are known for their conservative, understated approach and, above all, their stiff upper lip. But what really caused such an incredible panic in the establishment well known for its resilience? Money Making Machine In order to answer these questions we have to examine the basic principles on which the banking system operates and the mechanisms that caused the current crisis. Therefore, the same money is re-lent over and over again. Fundamental to this deposit creation principle is the percentage of deposits that a bank lends out. Building a Pyramid In a City bar back in 1998, an academic was discussing modern banking with his City colleagues from university. On closer examination there is a remarkable difference. Epilogue
Goodwin Procter — Financial Crisis Recovery Late-2000s financial crisis The TED spread (in red) increased significantly during the financial crisis, reflecting an increase in perceived credit risk. The financial crisis of 2007–2008, also known as the Global Financial Crisis and 2008 financial crisis, is considered by many economists the worst financial crisis since the Great Depression of the 1930s.[1] It resulted in the threat of total collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. In the immediate aftermath of the financial crisis palliative fiscal and monetary policies were adopted to lessen the shock to the economy.[19] In July 2010, the Dodd–Frank regulatory reforms were enacted in the U.S. to lessen the chance of a recurrence.[20] Background[edit] Share in GDP of U.S. financial sector since 1860[27] The U.S. Subprime lending[edit]
In Goldman Sachs we trust: classic example of regulatory capture by financial system hackers Professional financial hackers have a lot of common with the organized crime. And its not only addition to cocaine and prostitutes. GS is a large company that specialized in hacking financial system. And in a large company internal politic can turn really destructive both to the firm and society at large. And the fact that there are people with above average IQ at the top only makes them more dangerous in comparison with Mexican gangs. In a way the USA never had a subprime crisis. As Simon Johnson wrote in May 2009 the USA had a The Quiet Coup with banks becoming the most favored and the most protected industry of the Congress. Villains....who exactly? Those are serious, well educated and well motivated guys which are paid good money for finding the flaws and based on this knowledge subverting existing system of rules, rules which are the essence of financial system. Finanally, the Great Recession was brought on by a runaway financial sector, empowered by reckless deregulation.
Cruise to Frugality Island Forced cruise to Frugality Island for victims of neoliberalism Summing Up The American Dream (In One Cartoon) Hat tip: ZeroHedge Due to the conversion of the society to neoliberal model started under Reagan, chances of "happy retirement" (aka "golden age") for lower 90% of world population (and probably 80% of US citizens) became slim. So "insufficient retirement funds" problem for, say, 90% of the population is a feature of neoliberal regime, not just an accidental result of 2008 financial meltdown. Lack of retirement funds means that many seniors will be forced to work well past the traditional retirement age, if (big if) they can find employment. Dramatic growth of inequality with top 1% getting lion share of the wealth while 99% face shrinking pie and relentless pressure to "increase productivity" created by global labor arbitrage. Those factors of neoliberal conversion started under Reagan have been well documented individually. It feels so good to row your own boat.
Mr. Weill Goes To Washington - The Long Demise Of Glass-Steagall | The Wall Street Fix | FRONTLINE At a dinner in Washington in February 1998, Sandy Weill of Travelers invites Citicorp's John Reed to his hotel room at the Park Hyatt and proposes a merger. In March, Weill and Reed meet again, and at the end of two days of talks, Reed tells Weill, "Let's do it, partner!" On April 6, 1998, Weill and Reed announce a $70 billion stock swap merging Travelers (which owned the investment house Salomon Smith Barney) and Citicorp (the parent of Citibank), to create Citigroup Inc., the world's largest financial services company, in what was the biggest corporate merger in history. The transaction would have to work around regulations in the Glass-Steagall and Bank Holding Company acts governing the industry, which were implemented precisely to prevent this type of company: a combination of insurance underwriting, securities underwriting, and commecial banking. Citicorp and Travelers quietly lobby banking regulators and government officials for their support.