Authors: Charles Ferguson
Sandoz Pharmaceuticals
Sanford Bernstein
Sankey, Brian
Sanofi
Sarbanes-Oxley Act
Saudi Arabia
Savings & loan institutions (S&Ls)
collapse of
junk bonds and
mortgages and
Schmalensee, Richard
Schneiderman, Eric
Scholes, Myron
School dropout rates
School graduation rates
Schultz, Howard
Schwab (
see
Charles Schwab, Inc.)
Schwarzman, Steve
Scott, Hal
Seattle, Washington, homelessness in
Second-lien loans
Securities and Exchange Commission (SEC)
Securities Exchange Act of 1934
Securities Investor Protection Corporation (SIPC)
Securities rating (
see
Rating agencies)
Securitization food chain
Senate Banking Committee
Senate Permanent Subcommittee on Investigations
September 11, 2001 terrorist attacks
Severance payments
Shadow banking
Shapiro, Carl
Shapiro, Mary
Shearson Lehman
Shiller, Robert
Short-term financing
Sidak, Geoffrey
Silverado
Silverstein, Baron
Simmons, Ruth
Simmons Bedding Company
Simon, William
Simons, Jim
Singapore
SIVs (
see
Structured investment vehicles (SIVs))
60 Minutes
Skilling, Jeffrey
Sloan, Allan
Smith, Yves
Smith Barney
Snow, John
Software industry
Soros, George
South Korea
Soviet Union
S&P 500 stock index
Spain, debt crisis and
Spar, Debora
Sparks, Dan
Speakers’ bureaus
Special dividends
Special purpose entities (SPEs)
Spector, Allen
Speculative arbitrage
Sperling, Gene
Spitzer, Eliot
Squam Lake Group
Squared
Standard & Poor’s
Stanford, Allen
Stanford University
Medical School
State, US Department of
State government spending
Stated income loans
Stated liens
Statute of limitations
Steel industry
Stewart, Martha
Stiglitz, Joseph
Stock-index futures
Stock market
dot-com stocks
junk bonds and
1987 crash
oil shocks and
recovery in 1980s
technology stocks
Stock options
Stoneville
Strauss-Kahn, Dominique
Structural concentration
Structured investment vehicles (SIVs)
Student loans
Subpoena power
Subprime mortgages
Success of Open Source, The
(Weber)
Sudan
Sullivan, Martin
Sumitomo Bank
Summers, Larry
Supreme Court of the United States
Sweden
Swiss banks, tax evasion and
Sworn testimony
Synthetic CDOs
T
T-Mobile
Taconic Capital Advisors
Taibbi, Matt
Taiwan
Tax avoidance
Tax cuts
for wealthy
Tax evasion
Tax reform
Tea Party movement
Teaser rates
Teece, David
Telecommunications industry
Temin, Peter
10b-5 offence
Terrorism
Tett, Gillian
Texas Pacific Group
Thailand
Thain, John
Third parties
THL
Thornton, John
Thurow, Lester
Tightly coupled system
Timberwolf
Time Warner
Title search
Tourre, Fabrice
Trade deficit
Travelers Insurance
Treasury, US Department of the
Treasury instruments
Tricadia
Trillion Dollar Meltdown, The
(Morris)
Turkey
Turner, Lord Adair
Tyson, Laura D’Andrea
U
UBS
Undisclosed liens
Unemployment
Unions
U.S. Trust
University graduation rates
University of California, Berkeley
V
Venture capital investment
Verizon
Vernon Savings Bank, Texas
Verschleiser, Jeffrey
Vestar
Vietnam war
Viniar, David
Virgin Islands pension fund
Visa
Volatility
Volcker rule
W
Wachovia
Wade, Robert
Wall Street Journal
Walmart
Washington Mutual (WaMu)
Watergate affair
Waters, Maxine
Wealthy
children of
education and
income inequality and
policy dictated by
sources of wealth
tax cuts for
Weber, Steven
Weil, Raoul
Wells Fargo
Wharton School
WMC Mortgage
Workforce skills
World Bank
World Economic Forum (2011)
WorldCom
Wozniak, Steve
Y
Yahoo
Yale University
Yield spread premiums
Yom Kippur war
Z
Zames, Matthew E.
Zero-Sum Society, The
(Thurow)
Zingales, Luigi
Zuckerman, Greg
ABOUT THE AUTHOR
Charles Ferguson won an Oscar in 2011 for
Inside Job
, his documentary on the financial crisis, and was an Oscar nominee for his first documentary,
No End In Sight
, on the war in Iraq. He is a graduate of the University of California at Berkeley, holds a PhD in Political Science from MIT, and has been a technology policy consultant to
the White House and the Office of the US Trade Representative, as well as to leading technology companies including Apple, IBM, and Texas Instruments. He was the co-founder of Vermeer Technologies,
which invented the web tool Front Page, later sold to Microsoft. A former visiting scholar at MIT and Berkeley, he has also been a senior fellow at the Brookings Institution in Washington, DC. He
has written four books, and is a life member of the Council of Foreign Relations and a director of the French-American Foundation.
ENDNOTES
1
FICO is the stock ticker symbol for the Fair Isaac Corporation, the company that pioneered the three-digit credit
score.
2
That calculation was across all the securities. In the pool example used here, the 73.8 percent LTV implied equity of 26.2 percent. If LTV was
really 90.5 percent, the equity falls to 9.5 percent, which is 64 percent lower.
3
The puzzle here is why
Morgan Stanley
could have been on the long side in Hudson, since they were also selling seemingly toxic
instruments to their own investors. But it merely illustrates how few firms had the internal discipline of Goldman. Both Morgan and Goldman had large asset-management businesses that invested on
behalf of their clients; to a naïf at Morgan asset management, a Goldman-sponsored investment-grade security would look pretty reasonable. One can bet that no one at Goldman’s asset
management group bid for it.
4
: Yves Smith gives a cautious estimate of $128 billion of Magnetar-induced lending. The production of cash subprime CDOs over this period was
about $450 billion. Other estimates of the Magnetar impact are as high as $250 billion.
5
: Canadian Imperial bank of Commerce
6
: Swap agreements almost always include breakup fees calculated as the present value of the net stream of income due to the aggrieved party over
the remaining life of the deal.
7
: Merrill, for example, offered investors the opportunity to recover four times the return on referenced Madoff funds. An investor would put up,
say, $1 million, and receive a Merrill note in exchange, plus a top-up loan of $3 million. In return, Merrill received an investment fee, plus a hefty lending fee. To cover its liability, Merrill
then would typically invest the $4 million into the referenced Madoff fund—although it was not required to do so. Each month, it paid the amount of dividends the customer would have received
if he or she had a $4 million Madoff account, less a 20 percent incentive fee. Note that Merrill itself did not have to take any investment risk, and that customer funds were never directly
invested in a Madoff account.
8
. The original account was opened in 1986 with Chemical Bank, which later merged with Chase. The Chase/JPMorgan merger was in 2001, when Madoff
was on the verge of spectacular growth.