Twenty-five people at the heart of the meltdown ...

Guardian ^ | 26 Jan 2009 | Julia Finch

[BGHater]

The worst economic turmoil since the Great Depression is not a natural phenomenon but a man-made disaster in which we all played a part.In the second part of a week-long series looking behind the slump,Guardian City editor Julia Finch picks out the individuals who have led us into the current crisis

Alan Greenspan, chairman of US Federal Reserve 1987- 2006
Only a couple of years ago the long-serving chairman of the Fed, a committed free marketeer who had steered the US economy through crises ranging from the 1987 stockmarket collapse through to the aftermath of the 9/11 attacks, was lauded with star status, named the "oracle" and "the maestro".Now he is viewed as one of those most culpable for the crisis.He is blamed for allowing the housing bubble to develop as a result of his low interest rates and lack of regulation in mortgage lending.He backed sub-prime lending and urged homebuyers to swap fixed-rate mortgages for variable rate deals, which left borrowers unable to pay when interest rates rose.

For many years, Greenspan also defended the booming derivatives business, which barely existed when he took over the Fed, but which mushroomed from $100tn in 2002 to more than $500tn five years later.

Billionaires George Soros and Warren Buffett might have been extremely worried about these complex products - Soros avoided them because he didn't "really understand how they work" and Buffett famously described them as "financial weapons of mass destruction" - but Greenspan did all he could to protect the market from what he believed was unnecessary regulation. In 2003 he told the Senate banking committee: "Derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn't be taking it to those who are willing to and are capable of doing so".

[r9etb]

[Greenspan] is blamed for allowing the housing bubble to develop as a result of his low interest rates and lack of regulation in mortgage lending.

I don't see how Greenspan can be blamed for lack of regulation.... Isn't that a Congressional responsibility?

[mgc1122]

The Brits have done an outstanding of naming names ... a pity the American press is still in lapdog mode.

[marshmallow]

They could have added the names of Peter Schiff and Ron Paul to “six who saw it coming” and the name of Soros should be added to the list of those who caused it along with many others too numerous to mention.

[Amos the Prophet]

I don't see how Greenspan can be blamed for lack of regulation.... Isn't that a Congressional responsibility?

That, of course, is the dirty little secret. Those who benefitted hugely from the debacle, notably democrats in the house and senate, want to blame anyone but themselves for failing to protect the economy from themselves. They will never, of course, put the blame in their hip pockets where it belongs.

[Drango]

Barney Frank belongs somewhere near the top of the list.

[LRoggy]

The Federal Reserve has some oversight responsibility for the banks that are members of the Federal Reserve System, of which most banks are.

[WildcatClan]

You do not understand because you are not a Socialist. The fact that there was no mention of Barney Fwank, the Congressional Black Caucus, Freddie or Fanny tells me all I need to know about this article.

[E. Pluribus Unum]

Bawney Fwank belongs on that list.

His absences is very twoubling.

[silverleaf]

Soros avoided them because he didn’t “really understand how they work

horse spittle

[MosesKnows]

a man-made disaster

Do da name "Barney Frank" ring a familar note?

[free_life]

Barney Frank

[Star Traveler]

Are the “voters” anywhere on that list?

[stevestras]

Putting the American People on the list, but not Barney fRank.

Things that make you go hummm.

[Liz]

BINGO

Clinton shares at least some of the blame for the current financial chaos. He beefed up the 1977 Community Reinvestment Act to force mortgage lenders to relax their rules to allow more socially disadvantaged borrowers to qualify for home loans.

In 1999 Clinton repealed the Glass-Steagall Act, which ensured a complete separation between commercial banks, which accept deposits, and investment banks, which invest and take risks.

The move prompted the era of the superbank and primed the sub-prime pump. The year before the repeal sub-prime loans were just 5% of all mortgage lending. By the time the credit crunch blew up it was approaching 30%.

[Just mythoughts]

bttt

[Liz]

WHO LED US TO THE ROAD TO RUIN Angelo Mozilo, Countrywide Financial. Known as "the orange one" for his luminous tan, Mozilo was the chairman and chief executive of the biggest American sub-prime mortgage lender, which was saved from bankruptcy by Bank of America. BoA recently paid billions to settle investigations by various attorney generals for Countrywide's mis-selling of risky loans to thousands who could not afford them. The company ran a "VIP programme" that provided loans on favourable terms to influential figures including Christopher Dodd, chairman of the Senate banking committee, the heads of the federal-backed mortgage lenders Fannie Mae and Freddie Mac, and former assistant secretary of state Richard Holbrooke.

DODD Since June, Sen Chris Dodd (D-Conn) has faced an ethics inquiry over allegations that he received preferential treatment on two mortgages in 2003 from major lender, Countrywide Financial. And then came the dramatic financial meltdown last month, placing Dodd at the center of a controversial $700 billion financial rescue plan.

As a member and later chairman of the Senate Banking Committee, Sen. Dodd shoulders a good deal of the blame for the collapse of the national housing market, the subprime-mortgage-market meltdown and the convulsions on Wall Street which is costing taxpayers billions.

Reams of legislation Dodd has written or advocated affecting the housing, lending, insurance and securities industries have drained hundreds of billions out of the economy, ballooned the federal debt, cost tens of thousands of people their jobs and driven hundreds of thousands of homeowners into foreclosure, bankruptcy or both.

For his efforts, Sen. Dodd has been rewarded in the 2008 election cycle alone with $7.65 million in campaign contributions (he took in $11.7 million in all) from the securities, insurance, real-estate and commercial-banking industries. With $165,400, Sen. Dodd also tops the list of members of Congress who took campaign cash from Fannie Mae and Freddie Mac since 1989. Sen. Barack Obama, the self-styled agent of change, is a distant second at $126,000....

SEN DODD'S CAMPAIGN CONTRIBUTORS

Citigroup, $310,294;
SAC Capital Partners, $282,000;
United Technologies, $263,400;
AIG, $224,678;
Bear Stearns, $205,600;
St. Paul Travelers, $205,400;
Royal Bank of Scotland, $203,750;
Goldman Sachs, $175,600;
Morgan Stanley, $155,000;
Credit Suisse, $154,550;
Merrill Lynch, $134,950;
The Hartford, $94,350;
Bank of America, $91,300;
JPMorgan Chase, $129,150;
USB, $101,900;
Hartford Finance Services, $101,500
Lehman Brothers, $128,400;
KPMG, $113,100;
General Electric, $108,250;
Deloitte Touche, $108,000

[skipper18]

“I don’t see how Greenspan can be blamed for lack of regulation.... Isn’t that a Congressional responsibility?”

Not here. The Federal Reserve is the private banking systems private regulator. If they dont regulate, it dosent happen.

Please, someone here, tell me how 500 Trillion in derivitives sold against the future productivity of the United States should not have been regulated? I’d love to hear the rationale.

[AFreeBird]

I don't see how Greenspan can be blamed for lack of regulation.... Isn't that a Congressional responsibility?

The fed can set rules for members banks I think. Even just speaking publicly about a perceived problem would get noticed. And besides, if there was something that he felt required congressional regulation, he would get more than a fair hearing from congress if he had asked for one.

Now can he, should he, be held solely responsible? No way.

[Liz]

WHO LED US TO THE ROAD TO RUIN Angelo Mozilo, Countrywide Financial. Known as "the orange one" for his luminous tan, Mozilo was the chairman and chief executive of the biggest American sub-prime mortgage lender, which was saved from bankruptcy by Bank of America. BoA recently paid billions to settle investigations by various attorney generals for Countrywide's mis-selling of risky loans to thousands who could not afford them. The company ran a "VIP programme" that provided loans on favourable terms to influential figures including Christopher Dodd, chairman of the Senate banking committee, the heads of the federal-backed mortgage lenders Fannie Mae and Freddie Ma, and former assistant secretary of state Richard Holbrooke.

Fannie had gone from $1.2 billion in subprime-mortgage and securities purchases in 2000 to $9.2 billion in 2001 and $15 billion in 2002. Freddie's numbers were murkier, but clearly also on the rise. In 2003 alone, the two bought $81 billion in subprime securities—which also count against the goals.

In 2004, after a forensic audit by OFHEO, serious accounting manipulation was found at Fannie, and Franklin Raines, its chairman, was compelled to resign (as was and Timothy Howard, its chief financial officer).

RAINES was fraudulently cooking Fannie's books in order to collect millions in bonuses. Raines was eventually fired and ordered to give back $50 million in bouses (don't hold your breath). Raines was fired for fraudulent practices, but he walked away with millions, proving you can fool most of the people most of the time until you get caught....and NEVER ever serve a day in jail for being a crook.

Franklin Raines (seen here) looted and pillaged Fannie Mae as Clinton's appointee.

RAINING MONEY - Franklin Raines fired for cooking the books---walks away w/ $90 million tax dollars

Franklin Raines reigned for 5 years following Clinton's appointing him as CEO of Fannie Mae, the US' quasi-governmental mortgage house, has now been ousted.

There are several ongoing investigations of Fannie Mae's operations and accounting practices covering the last 5 years in order to determine when accounting irregularities started and the magnitude of the financial shortfalls. Current estimates indicate that there was a $9 billion misstatement of earnings and accounting irregularities between 2000-2004.

(POSTER'S NOTE: Can you say offshore wire transfer?)

Former chief executive Franklin Raines received more than $40 million in bonuses and other pay as a result of falsely inflated earnings at the US' largest mortgage finance company. This is according to a supplement of a lawsuit filed by Ohio Attorney General Jim Petro. Fannie Mae added "tens of millions of false revenue" to meet "Raines' 1999 publicly announced goal to double" earnings over the next five years, Petro's November 23, US District Court in Washington alleges. The filing alleges that, "Raines personally profited by over $40 million by this false earnings history.

Update -- 2/22/2006: Former Senator Warren Rudman's team of investigators and auditors selected from his law firm, Paul, Weiss, Rifkind, Wharton & Garrison, and from Huron Consulting Group presented their 600-page report calling Fannie Mae's accounting systems "grossly inadequate." It is based on a review of millions of documents.

The report found that accounting obfuscations were intended to increase stock valuations, thus increasing executive bonuses.

Raines was one of the most influential and politically savvy figures in Washington is identified by the Rudman investigation as not directly knowing that Fannie Mae's accounting practices violated rules. The report does state, "We did find, however, that Raines contributed to a culture that improperly stressed stable earnings growth and that... he was ultimately responsible for the failures that occurred on his watch".

Raines will continue to live well being supported by Fannie Mae's shareholders. Some relevant facts include:

-- Raines and his wife will be paid $114,393 a month as long as they live.

-- Stock options: Raines holds vested stock options worth roughly $5.7 million.

-- Stock bonuses: Raines was granted awards, payable in stock, for reaching performance goals. Under the program, he got 69,577 shares... half of what Fannie determined he should receive in January. At Monday's close, the shares are worth $4.9 million. It is unclear if he will receive the rest.

-- Deferred pay: For tax planning while employed by the company, Raines was allowed to put off the receipt of payment. These deferred past payments total $8.7 million

Future salary: Although Fannie Mae says Raines' retirement was effective December 21, 2004, he is seeking to have it effective as of June 22, 2005, and thereby receive $600,000 more in pay.

Mr. Raines followed a well-worn path in the United States during the later half of the 20th century. His humble beginnings were in Seattle. He won a scholarship to Harvard and was a Rhodes Scholar at Oxford. He worked on Wall Street for over a decade in the prestigious firm Lazard Freres. He was a member of President Clinton’s cabinet and director of his Office of Management and Budget. In 1999, Clinton selected him for the position of Fannie Mae CEO.

Following revelations of the financial scandal, Mr. Raines took early retirement from Fannie Mae so that he could collect a compensation package including $1 million per year for life and $11 million in vested stock. In 2003 Mr. Raines was paid $20 million in salary and bonus.

Fannie Mae is facing criminal investigations by the Justice Department, operational investigations by the SEC, and various Congressional investigations. There are questions regarding earnings statements being incorrectly inflated. In 2003, if derivative and other losses had been included, no bonuses would have been paid to top executives. However, deferral of the losses allowed declared earnings to reach a level which triggered maximum executive bonuses.

It is a far stretch to imagine that Franklin Raines actually was capable of satisfying the requirements of the positions he held from Harvard to Director of the White House Office of Management and Budget. If he had been competent enough to hold those positions, how could he have been Fannie Mae's CEO for 5 years and allowed, not known about, or not understood that $9,000,000,000 was being mishandled.

=============================================

Fannie Mae CEO Franklin Raines Letter to Shareholders----2003 Fannie Mae Annual Report

EXCERPT Ten years ago......the typical conforming mortgage required a down payment of 10 to 20 percent, and low-down payment mortgages were considered too risky. But then we helped to standardize the 3 to 5 percent down payment loan, brought it to global capital markets, and made it available to lenders and communities nationwide. Now low-down payment loans are commonplace. And we just adopted a new variance in our underwriting standards that will make the $500 down payment loan widely available as well...

In 1994, we pledged to provide $1 trillion in capital to ten million underserved families by the end of 2000. Thanks to our housing and industry partners, we met that goal early.

Then in 2000, we launched our American Dream Commitment, a pledge to provide $2 trillion in capital to 18 million underserved families by the year 2010, including $400 billion targeted specifically for minority families (later raised to $700 billion in response to President Bush’s Minority Homeownership Initiative). After four of the strongest years in housing and mortgage finance history, we’ve already surpassed the top-line goals of this commitment. But our work is far from complete.

So in January 2004, we announced our Expanded American Dream Commitment and pledged significant new resources to tackle America’s toughest housing challenges. Our new commitment has three main goals.

First, we will expand access to homeownership for six million first-time home buyers in the next ten years, including 1.8 million minority first-time home buyers. We also will help raise the national minority homeownership rate from 49 percent to 55 percent, with the ultimate goal of closing it entirely.

Second, we will help new and long-term homeowners stay in their homes through a series of initiatives, and commit $15 billion to preserve affordable rental housing and $1.5 billion to support the revitalization of public housing communities.

Third, we will increase the supply of affordable housing and support community development activities in at least 1,000 neighborhoods across the country through our American Communities Fund, and through targeted investments like Low-Income Housing Tax Credits that help finance affordable rental housing.

It is because of initiatives like our Trillion Dollar Commitment and our American Dream Commitment that we have exceeded our HUD affordable housing goals for ten consecutive years.

Fannie Mae CEO Franklin Raines Letter to Shareholders----2003 Fannie Mae Annual Report

==========================================

December 28, 2004
RAINES' FAREWELL
By PAUL THARP NYP
http://www.nypost.com/business/37312.htm

Although Fannie Mae chief Franklin Raines was fired for bungling its books, he got a $90 million parachute — not counting a monthly pension of $116,300 for life (plus COLAs). The 55-year-old Washington, D.C. insider and his CFO J. Timothy Howard left their jobs under a cloud of suspicion that the execs undermined the financial soundness of Fannie Mae, creating losses of up to $9 billion.

Regulators overseeing Fannie Mae urged it not to pay any benefits to either executive until reviews are made of their contracts, filings said yesterday. Fannie Mae's filings federal Raines owns options giving him $5.8 million in net profit after redeeming them, plus another $8.7 million in deferred compensation for his six years at the helm.

Raines has already collected $4.87 million in special performance shares this year and also keeps $5 million of paid-up life insurance. He and his spouse get free medical and dental benefits for life, worth over $1 million.

Last year, Raines earned $20 million in salary, bonuses and stock awards. The Securities and Exchange Commission said he broke accounting rules by playing with risky derivatives. After he was fired, Raines told the board that he's entitled to get paychecks until next June 22 giving him another $600,000, which triggers a $2,000 monthly raise in his lifetime pension.

He also says he's entitled to disputed options with a gross value of about $5.6 million. To keep Raines happy within philanthropic circles, Fannie Mae will match his charitable contributions by $10,000 a year.

Raines' CFO Howard gets a parachute valued at more than $13.1 million — not including a monthly pension of $36,071 for life (plus COLAs). Howard gets free medical and dental coverage for himself and family for life, and as well as the matching $10,000 annual perk in making charitable contributions.

===============================================

9/26/08 UPDATE: LA grand jury probing Countrywide VIP loans
LAtimesblogs via WSJ ^ | September 25, 2008 | Peter Viles

FR Posted on 09/26/2008 5:50:44 AM PDT by stockpirate

The Wall Street Journal reports that a federal grand jury in Los Angeles is investigating the so-called "Friends of Angelo" loan program at Countrywide Financial, under which influential borrowers received preferential terms on home loans. The reported borrowers under the program have included U.S. Sen. Chris Dodd (D-Conn.), former Fannie Mae Chief Executive Franklin Raines, and California state appeals court judge Richard Aldrich. (Excerpt) Read more at latimesblogs.latimes.com ...

[Starfleet Command]

They could have added the names of Peter Schiff and Ron Paul to “six who saw it coming” and the name of Soros should be added to the list of those who caused it along with many others too numerous to mention.

Trifecta of names missing from the list, kudos!

[Army Air Corps]

Wow, they actually name Bill Clinton and Chris Dodd!

[a fool in paradise]

The American public - There's no escaping the fact: politicians might have teed up the financial system and failed to police it properly and Wall Street's greedy bankers might have got carried away with the riches they could generate, but if millions of Americans had just realised they were borrowing more than they could repay then we would not be in this mess. The British public got just as carried away. We are the credit junkies of Europe and many of our problems could easily have been avoided if we had been more sensible and just said no.

[a fool in paradise]

Missed Barney Fwank.

[McGruff]

I wesent that wemark.

[r9etb]

Please, someone here, tell me how 500 Trillion in derivitives sold against the future productivity of the United States should not have been regulated? I’d love to hear the rationale.

We're on the same side there, FRiend ... I was only taking issue with that particular sentence in the article.

[NVDave]

The Fed has regulatory oversight of some aspects of the banking system, in particular the banks that are members of the Federal Reserve.

[a fool in paradise]

With $165,400, Sen. Dodd also tops the list of members of Congress who took campaign cash from Fannie Mae and Freddie Mac since 1989. Sen. Barack Obama, the self-styled agent of change, is a distant second at $126,000....

The difference between $165,400 and $126,000 is not so great when you realize that it took Dodd neat 20 years to collect that much and Barack Obama less than 4 years to do so.

Barry should have his name added to the list. And his insistence on a bailout which has only seen the market respond with negatives.

[NVDave]

Ask Phil Gramm (R-TX). He was the guy who wrote the Commodities Futures Modernization Act of 2000, which allowed energy and financial futures to be moved outside the regulated futures exchanges that have been around for decades to trade ag commodity futures.

[Blood of Tyrants]

They left out Congress in general, who has the responsibility to oversee Fannie Mae and Freddie Mac, and Barney Frank in particular who did all he could to cover for them.

[Army Air Corps]

Yep. No mention of the Banking Queen.

[r9etb]

The Fed has regulatory oversight of some aspects of the banking system, in particular the banks that are members of the Federal Reserve.

However, I do not believe that the really big players -- Lehman Bros., Bear-Stearns, Goldman-Sachs, and so on -- were not covered by Fed oversight.

Perhaps it's just a difference in emphasis....

It was interesting to see Bill Clinton mentioned by name, finally.

[kidd]

The whole article is a load of crap.

It is meant to bolster the Democrat argument that greedy corporations and eeeevil republicans are to blame.

No mention of the millions of people who couldn’t pay their mortgage.

No mention of Clinton-era measures that enabled these risky loans (enhanced Community Reinvestment act, etc).

No mention of the purposeful misdirection by Frank and Dodd. No mention that Bush attempts to provide more oversight to Fannie/Frddie was blocked by these two.

And no mention that Obama was part of a legal team that forced Citibank to provide loans to risky lenders in Chicago.

[NVDave]

I would add to the list of culprits:

- the CEO’s of the monoline insurers
- the quants who created the VaR model
- economists of every stripe up and down Wall Street and in the housing industry
- the National Ass’n of Realtors

And to the list who saw it coming:

- David Einhorn, Greenlight Capital
- Bill Ackman, Pershing Square
- Nassim Nicholas Taleb
- Benoit Mandelbrot

And from quite a remove of time:

- Hyman Minsky
- Irving Fisher

[AEMILIUS PAULUS]

This recent debacle is what I call the first sack of the American public. There was a vast amount of wealth accumulated by the American public post WWII. The politicians seeing the changing demographics and aware of the various ethnic coalitions need the money to buy the votes. The politicians cannot yet actually seize our wealth so they do it indirectly. The pols will now bail out the Third Worlders and we get to thank them.

[a fool in paradise]

Or his boy toy on this inside.

[Protect the Bill of Rights]

Alan Greenspan, chairman of US Federal Reserve 1987- 2006
Mervyn King, governor of the Bank of England
Bill Clinton, former US president
Gordon Brown, prime minister
George W Bush, former US president
Senator Phil Gramm
Abby Cohen, Goldman Sachs chief US strategist
Kathleen Corbet, former CEO, Standard & Poor’s
“Hank” Greenberg, AIG insurance group
Andy Hornby, former HBOS boss
Steve Crawshaw, former B&B boss
Adam Applegarth, former Northern Rock boss
Dick Fuld, Lehman Brothers chief executive
Ralph Cioffi and Matthew Tannin
Lewis Ranieri
Joseph Cassano, AIG Financial Products
Chuck Prince, former Citi boss
Angelo Mozilo, Countrywide Financial
Stan O’Neal, former boss of Merrill Lynch
Jimmy Cayne, former Bear Stearns boss
Christopher Dodd
Geir Haarde, Icelandic prime minister
The American public
John Tiner, FSA chief executive, 2003-07

... and six more who saw it coming
Andrew Lahde
John Paulson, hedge fund boss
Professor Nouriel Roubini
Warren Buffett, billionaire investor
George Soros, speculator
Stephen Eismann, hedge fund manager
Meredith Whitney, Oppenheimer Securities

[NVDave]

Correct, the i-banks were outside of Fed regulatory control... BUT, the Fed set an expectation of a safety net when the Fed orchestrated the bailout of LTCM in ‘98.

The Fed could have had one of their “Come to Jesus” meetings at the NY Fed, calling in the heads of the i-banks and laid down the warning “You’re way too levered up, you’re too large for us to backstop you. If you go under, you can take under the US banking system. Therefore, we (the Fed) will be approaching Congress to recommend additional regulation of investment banks.”

The Fed has MANY more tools at their disposal than just the ones enshrined in paper. They have this very broad mandate to assure continued operations of the US banking system, and if the Fed had shown some real leadership (rather than idiotic cheerleading), the Fed could have made such a “unofficial chat” and subsequent recommendations to Congress under their broad mandate for insuring open market operations and banking stability. If the Fed had been ignored (and it is is entirely possible that Frank, Dodd, et al would have stiff-armed Bernanke), then the Fed would at least have had the moral authority to treat the banks with much less courtesy today. The Fed would have been able to say “We did our job. Congress did not. We’re now going to take extraordinary measures...” and so on.

The Fed has extraordinary powers over the banking system, since they are the “bank of last reserve” in addition to a huge repository of research, data, etc. If we had someone other than an academic running the Fed, some things might have been done....

[brytlea]

Check out the comments section. People want to blame Thatcher and Reagan!

[brytlea]

Even is one is gay that picture has to make you ill.

[VinL]

Our problem is not who created the financial crisis, the problem is that bi-partisan Washington is in the process of using our money to conceal its complicity. And the fact that these bi-partisan Washingtonians can do just that- demonstrates how we have absolutely no power over this oligarchy that has taken over our government.

Those who are pointing partisan fingers are playing into the Washingtonians' hands- if they at least can keep the people split along a partisan divide, they don't have to worry that the citizens will unite against the real enemy- the Wall St/Washington oligarchy that controls our country.

Vin f/k/a/ wegotsarah.

[r9etb]

Well and good ... but what you're basically saying is that it was beyond the Fed's actual powers to enforce any sort of discipline on the i-banks. And that it was, in fact, up to Congress to regulate these transactions. From that perspective, it's unfair to blame Greenspan for something he couldn't mandate to begin with.

Greenspan doesn't escape blame -- you're correct that he could/should have tried to do something. But more than that: whether he was lucky or good, he basically led the Fed into the trap of believing that they could "manage the economy," with all of the perils that implies. And once he handed over to somebody who was not as lucky or good, problems would be almost inevitable.

[jonno]

uuummm... what?

[a fool in paradise]

I'd say Soros saw it coming because it went along as planned. But then, I'm a skeptic like that...

[brytlea]

I’m sorry, bad wording. What I meant to say is that even a gay person, looking at the picture, would probably feel sick.

[Protect the Bill of Rights]

Soros was the master manipulator (IMHO). Makes me a skeptical cynic as well..

[NVDave]

It is indeed up to the SEC and Congress to regulate them. But their appetite for risk, especially in the face of these idiotic computer models of risk, was fed by Greenspan’s backstopping them for the EXACT same failure in ‘98.

You’re right that Greenspan doesn’t escape blame - I blame Greenspan the most for setting an expectation of bailing out funds that take idiotic levels of risk.

Bernanke, if he had any market experience, would have told the Street that a) he isn’t Greenspan, b) that means he isn’t going to backstop the i-banks for their idiotic appetite for risk, c) because their portfolios had become far, far bigger than LTCM’s.

[a fool in paradise]

http://en.wikipedia.org/wiki/George_Soros

Currency speculation
On Black Wednesday (September 16, 1992), Soros became immediately famous when he sold short more than $10 billion worth of pounds, profiting from the Bank of England’s reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the Bank of England was forced to withdraw the currency from the European Exchange Rate Mechanism and to devalue the pound sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed “the man who broke the Bank of England.”

The Times of Monday, October 26, 1992, quoted Soros as saying: “Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell.”

According to Steven Drobny,[15] Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. “Soros’ contribution was pushing him to take a gigantic position,” in accord with Druckenmiller’s own research and instincts.

In 1997, during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member.

Insider trading conviction
In 1988, he was asked to join a takeover attempt of the French bank Société Générale. He declined to participate in the bid but did later buy a number of shares in the company. French authorities began an investigation in 1989, and in 2002 a French court ruled that it was insider trading as defined under French securities laws and fined him $2 million, which was the amount that he made using the insider information.

Punitive damages were not sought because of the delay in bringing the case to trial. Soros denied any wrongdoing and said news of the takeover was public knowledge.[17]

His insider trading conviction was upheld by the highest court in France on June 14, 2006.[18] In December, 2006 he appealed to the European Court of Human Rights, claiming that the 14-year delay in bringing the case to trial precluded a fair hearing.[

[Protect the Bill of Rights]

I am looking for the date when he became a naturalized citizen....

[veracious]

Liz, thank you for the info excepts you’ve provided here!