Frontline’s, The Warning Part 4
We were unable to find this video without commercials, so just fast forward to 3:08 when the actual content starts
“Only Congress had the legal authority to stop Born. Rubin, Greenspan, and Levitt lobbied hard. Hearings were held almost immediately in both the House and the Senate. That summer of 1998, Born testified four times before hostile Congressional committees. Then Born’s warning became a prophecy. The hedge fund long term capital management was melting down. A quiet panic had begun. It looked exactly what Brooksley Born had been warning about. Known on the street as LTCM, it was the trillion dollar favorite of ‘in-the-know investors.’ David Mullens and John Merriweather opearated LTCM outside of government regulations. LTCM invented complex mathematical formulas and used derivatives to place their bets. Neither the government, nor investors, knew anything about how LTCM worked. It was a completely secret process. LTCM did business with 15 of Wall Street’s biggest banks, leveraging 5 billion dollars into more than 1 trillion in derivatives. Then trouble. LTCM’s complicated computer models were failing, rocked by a financial crisis in Russia.”
If you missed the former parts, click for Part 1 or Part 3 (Part 2 was removed from YouTube).
[...] to regulate itself… “ If you missed the former posts, click for Part 1, Part 3, or Part 4 var fbShare = {url: [...]
[...] to this regulatory gap over and over until we learn from experience.” Part 1, Part 3, Part 4 or Part 5. As you know from our prior posts of this Series, Part 2 was removed from the [...]