Worldwide effect of the U.S. financial crisis

When you are in the security business and have used investigative skills around the world, it is not easy to “switch off”.

If you are in security, you know what I mean. When you go to a restaurant, you are the one who finds a seat where your back is to the wall – it’s instincive.

That’s why the current financial crisis has always bothered me. Not so much for what happened in the U.S. – that was easy to understand….too many people living beyond their means, using their homes as ATM machines. That was a bubble just waiting to burst.

I am talking about the rest of the world. The old phrase explains some of it; “When Wall Street sneezes, the rest of the world catches cold”. Unfortunately, Wall Street didn’t just sneeze – it contracted an ailment similar to Lyme Disease and the rest of the world seems to have caught something resembling a plague.

If you are like me and you want to try and make some kind of sense of it all, I’d recommend you watch the CNBC investigative documentary “House of Cards”. David Faber does a brilliant job of exposing all that was wrong with Wall Street – the excess, greed and blatantly unethical practices that crashed this country’s economy and took it to the brink of another depression.

So many people in high financial positions knew that what they were doing was wrong. It was a glorified PONZI scheme with shaky loans being repackaged and reworked as triple AAA investments. Anyone who watches the CNBC expose will see that cities and towns as far away as Norway were duped into investing in these glorified junk bonds, having been promised that they carried a high investment rating and were set to deliver high, steady returns.

Today, theses authorities are reeling under the losses and it is predicted that the worst news has not been fully realized yet. The reason why they bought into the promises? Simply put, they just did not understand what they were getting into. One Norweigan Mayor said that she will never trust a salesman in a sharp Armani suit again.

To put it into perspective, when Faber asked Allen Greenspan, the former Chairman of the Federal Reserve if he knew what the “CDO’s” were that were being issued by Wall Street financiers, he replied; “I could not understand them and I have a good grasp on economics and mathematics AND I have access to a couple of hundered Phd’s – yet none of us could understand them”.

Bernie Madoff, Wall Street hedge fund managers…it doesn’t matter from where the promises come – if it seems too good to be true – it probably is too good to be true.

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