The Arbitrage Conspiracy
We all know about the financial meltdown of 2008 and how a confluence of greed and government incompetency almost brought the entire world economy to its knees.
What most people don’t know is the fact that there was a conspiracy to get companies and banks to buy a financial product called a CDO and then buying insurance against the CDO failing. And all along, structuring the CDO with poor quality securities that looked ok, but were really ready to fail.
There have been and continue to be many lawsuits about this issue. The fact is that the bankers conspired with each other to make a lot of money by selling crappy debt bundled up to look like good debt.
If you really want to understand how this conspiracy worked you should read The Big Short by Michael Lewis. While Lewis does not call it a conspiracy, he does call it the Doomsday machine. His account will make your blood boil.
He now has a follow on book called Boomerang which is all about the failing of government debt and its origin in the crisis of 2008.
This is conspiracy which does not seem to have an end.