Frontline: Breaking the Bank TV - The Flaw 2011 - Enron: The Smartest Guys in the Room 2005 - Will Hutton - Samuel Edward Konkin III - Shirley Williams - George W Bush - Barack Obama - Masters of Money TV - Brooksley Born - Paul Krugman - Robert Kennedy - Noam Chomsky - George Papandreou - Joseph Stiglitz - John Pilger - Milton Friedman - Philip Hampton - Nathaniel Branden - John Florio - Harry Browne - Walter B Wriston - Paul Foot - Wisdom 15:12 - George Soros - Sarah Palin - Benjamin Barber - Thomas Frank - Antonio Negri - Steve Fraser - John Maynard Keynes - Paul Volcker - Arundhati Roy - Henry Wadsworth Longfellow - Jeremy Grantham - Martin Durkin TV - Ha-Joon Chang - Lev Timofeev - Misha Glenny - Steven D Levitt & Stephen J Dubner - New York: America’s Busiest City TV - Nafeez Ahmed TV - The Revolution Will Not Be Televised TV - Inside Story TV - The New Statesman TV - The Corbett Report - Floored 2009 - Jeff Booth TV - Jeff Stoller & Boston Review online - Simon Schama TV - Saving Capitalism 2017 - Andrew Marr TV - World’s Busiest Cities TV - Adam Curtis TV - Gaming Wall Street TV - Second Thought online - John Smith -
They created the largest bank in America. But it was troubled from the beginning. Government took over. Frontline: Breaking the Bank, PBS 2009
2008: The markets were teetering. Nobody knew how bad it was going to get. On one weekend in September the entire American financial system would be changed. ibid.
[Henry] Paulson would push the bankers to handle the Lehman crisis on their own. ibid.
[John] Thain realised he had no choice: he agreed to sell Merrill Lynch to Bank of America for $50 billion. ibid.
Lehman Brothers was headed for bankruptcy. ibid.
Paulson had bet the markets would take care of themselves; he would soon discover he was wrong. ibid.
Paulson received the money – $700 billion known as TARP – Troubled Asset Relief Program. ibid.
Paulson gave each man a single piece of paper spelling out the conditions. ibid.
In one day everything had changed. ibid.
The marriage between Bank of America and Merrill Lynch was already showing signs of strain. ibid.
Merrill’s toxic assets were eating a hole in the balance sheet. ibid.
There’s a conceptual framework with the way people deal with reality … I found a flaw … in the model I perceive. The Flaw, Greenspan, 2011
When they start to treat a good as a financial asset, as people started to do with houses in the boom, that’s when you get into a very unstable market. ibid. George Cooper, fund manager
The fatal flaw was the assumption that real estate values would always go up. ibid. Nell Minow, corporate watchdog
Who was responsible for the downfall of Enron? Only a few years ago Enron was the nation’s seventh largest corporation. Enron: The Smartest Guys in the Room, written McLean & Elkind & Gibney, 2005
Ken Lay and Jeff Skilling had built their own plush state rooms. They were known as the smartest guys in the room. Captains of a ship too powerful to go down. ibid.
News of shredding at Enron raised more questions. ibid.
20,000 employees had lost their jobs. ibid.
In Washington, Lay became part of a new crusade to liberate businessmen from the rules and regulations of government. ibid.
George Bush senior helped secure billions in government subsidies for Enron International. ibid.
In 1987 two oil traders made bets for Enron on whether the price of oil would rise or fall ... Enron Oil always seemed to win. ibid.
At the board meeting the auditors told Lay that [Louis] Borget and his traders were manipulating earnings, destroying daily trading records and probably gambling way beyond their limits. ibid.
Lay encouraged his traders to gamble more. ibid.
Enron would become a kind of stock market for natural gas ... Transform energy into financial instruments that could be traded like stocks and bonds. ibid.
Market to market accounting allowed Enron to book future potential profits on the very day the deal was signed. ibid.
‘The insiders had sold off a billion dollars of their stock in the preceding several months.’ ibid. Bill Lerach, attorney for shareholders
Though Lou Pai flew away from Enron with $250 million the divisions he left behind lost a total of nearly $1 billion but Enron managed to disguise that fact. ibid.
Enron mounted a campaign to capture the hearts and minds of stock analysts. ibid.
The game was called Pump and Dump. Top execs would push the stock price up and then cash in their multi-million dollar options. ibid.
Enron had vast natural gas operations all over the world. They had cost billions to build and most were performing terribly. ibid.
The analysts weren’t analysing at all; they were willing to believe virtually anything Enron told them. ibid.
‘Enron has created the market to buy and sell bandwidth like a commodity. Ask why.’ ibid. Enron advert
Enron’s stock soared 34% in two days. ibid.
When Enron announced its latest plan to trade weather, people wondered whether it was good science or science fiction. ibid.
[Andrew] Fastow had to figure out a way to keep the stock price up by hiding the fact that Enron was $30 billion in debt. ibid.
Traders soon discovered that by shutting down power plants they could create artificial shortages that would push prices even higher. ibid.
The year-long energy crisis would cost the state of California $30 billion. ibid.
Ken Lay did have easy access to the Bush administration. ibid.
Jeff Skilling abruptly resigns. ibid.
The SEC launched an investigation when the Wall Street Journal published articles revealing Fastow’s murky deals. Enron announced massive financial restatements. ibid.
Enron’s accounting firm Arthur Anderson had begun destroying its Enron files. On October 23rd Anderson shredded more than one ton of paper. ibid.
Enron declared bankruptcy. ibid.
Civility is under siege as a market economy makes strangers of us all. Will Hutton, The World We’re In p7
The goal of agorism is the agora. The society of the open marketplace as near to untainted by theft, assault, and fraud as can be humanly attained is as close to a free society as can be achieved. And a free society is the only one in which each and every one of us can satisfy his or her subjective values without crushing others’ values by violence and coercion. Samuel Edward Konkin III
The market matches demand and supply better than the planners do. It responds more easily to changing fashions and needs. It is rather good at getting rid of unsuccessful enterprises. Shirley Williams, Politics is for People
I’ve abandoned free market principles to save the free market system. George W Bush, 16th December 2008
A free market was never meant to be a free license to take whatever you can get whenever you can get it. Barack Obama, Copper Union speech
Nor is the question before us whether the market is a force for good ... Without a watchful eye, the Market can spin out of control. Barack Obama, Berlin New World Order speech
Friedrich Hayek was a champion of the market. He inspired many of the people who built the world we live in today. For more than a generation Western leaders came to embrace one central economic idea: the free market. Masters of Money II: Hayek, BBC 2012
Of all the big pro-market thinkers, Hayek was by far the most radical. ibid.
Hayek’s advice to governments was to step back and do nothing. ibid.
The market does most good when it’s most free. It’s our desire to control it that most often turns it against us. ibid.
Hayek had been studying the American boom. ibid.
Strong’s intervention really paved the way for the financial system we have today. Thanks to all that credit he created, the Stock Market rose higher and higher. ibid.