From the author:
The shaft starts driving
It started with the events around Bankers Trust and Andy Krieger in January 1988. An internal bank audit showed that option trader Andy Krieger creatively embellished his trading results. In order to avoid a public scandal, the events were concealed and the books manipulated with the help of the international auditing firm Ernst and Young.
Although only a few were affected and no one was harmed, it should prove a big mistake that the wave was not stopped here. Since the case was too complex for the prosecutor, there was no charge. This would send a clear signal to the capital market - the manipulation of books pays off! And the wave could take full swing.
The wave calls for their first victims
Not five years later, the wave caught its first innocent victims - in December 1994 had due to complex interest speculation Orange County, a district in the state of California, bankruptcy. Treasurer Robert L. Citron at the time speculated on interest rates for innovative bond products developed by Salomon Brothers and Credit Suisse First Boston.
At the same time, he completely overlooked the risk that the interest rate landscape could change from one day to the next. As a result, Orange County had to file for bankruptcy and the citizens of Orange County had to accept substantial reductions in government services as well as higher taxes. For the first time the wave had picked up voters, who, although they were not involved in the speculations, were asked to pay
The wave threatens the USA
Now, it would not even be four years before the wave threatened to overturn the entire United States financial system. What happened? Long-Term Capital Management (LTCM) was an 1994 by John Meriwether (former Vice PresidentChef and head of bond trading at Salomon Brothers). 1998 suspended the Russian government's payment on bonds and massively devalued the ruble.
LTCM lost a fortune overnight and could only be rescued by the intervention of the US Federal Reserve, led by Alan Greenspan. In April 1999, President Bill Clinton had to publish a report on the financial crisis.
The US banking system from collapse?
For the first time, the entire banking system in the United States of America was on the brink of collapse and millions of citizens would have been saved for their savings.
It was only thanks to the rapid intervention of the central bank and the President of the USA that the worst could be prevented. But the wave was not stopped, but spread undisturbed.
The wave unfolds its full destructive power
After the wave was not absorbed in the US, she was able to expand herself undisturbed and with full force to Europe. What we now call the beginning of the financial crisis in hindsight is, in reality, its continuation! Richard Fuld, the CEO of one of the largest investment banks in the Americas, made the big deal with the resale of real estate loans to European banks.
But what initially appeared to be a safe investment soon broke into smoke and sound. Due to the high losses and write-downs of the credit portfolio, Lehman Brothers had to take part in the 15. September 2008 filed for bankruptcy and thus initiated the most severe global economic crisis since the 20 years.
A nationalization wave begins, as a desperate attempt by the politicians to save the financial system and thus the real economy. However, in vain. More and more banks must be forced to state and taxpayments are being pumped out of the financial system.
Now all citizens of the old and new world are really affected. State budgets are reduced, millions of jobs are destroyed and social unrest is created. The wave has reached its climax and an end is not yet in sight
The wave is always drawing larger circles
What we learn from these examples is that they are all interconnected, showing that the wave is ever-widening, capturing more and more people worldwide with their destructive power. Whereas at the beginning of the 90 years only a few were indirectly affected by the wave, nowadays we are all directly or indirectly exposed to the destructive forces of the wave!
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