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It’s crucial to understand that ordinarily the FBI applies for a wiretap separately from the National Security Agency. The NSA had tapped my phones for years, going back to the 1993 World Trade Center attack. But those wire taps would not automatically get shared with the FBI, unless the Intelligence Community referred my activities for a criminal investigation. The FBI took no such action. Instead—by coincidence I’m sure, the FBI started its phone taps exactly when the Senate Foreign Relations Committee planned a series of hearings on Iraq in late July, 2002.212 That timing suggests the FBI wanted to monitor what Congress would learn about the realities of Pre-War Intelligence, which contradicted everything the White House was preaching on FOX News and CNN. In which case, the Justice Department discovered that I told Congress a lot—and Congress rewarded the White House by pretending that I had not said a word. But phone taps don’t lie. Numerous phone conversations with Congressional offices show that I identified myself as one of the few Assets covering Iraq.213 Some of my calls described the peace framework, assuring Congressional staffers that diplomacy could achieve the full scope of results sought by U.S policymakers.

[C]ritics of Canadian securities regulators sometimes point out that a number of high-profile US securities cases have resulted in prison sentences for the offenders, while incarceration for Canadian securities law violators seems very rare...[A]s has often been noted, incarceration is far more frequent in the United States for crimes of all kinds, yet it is not usually suggested that this is proof that the United States is generally a safer place to live than Canada.

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It was the German powerhouse Deutsche Bank AG, not my fictitious RhineBank, that financed the construction of the extermination camp at Auschwitz and the nearby factory that manufactured Zyklon B pellets. And it was Deutsche Bank that earned millions of Nazi reichsmarks through the Aryanization of Jewish-owned businesses. Deutsche Bank also incurred massive multibillion-dollar fines for helping rogue nations such as Iran and Syria evade US economic sanctions; for manipulating the London interbank lending rate; for selling toxic mortgage-backed securities to unwitting investors; and for laundering untold billions’ worth of tainted Russian assets through its so-called Russian Laundromat. In 2007 and 2008, Deutsche Bank extended an unsecured $1 billion line of credit to VTB Bank, a Kremlin-controlled lender that financed the Russian intelligence services and granted cover jobs to Russian intelligence officers operating abroad. Which meant that Germany’s biggest lender, knowingly or unknowingly, was a silent partner in Vladimir Putin’s war against the West and liberal democracy. Increasingly, that war is being waged by Putin’s wealthy cronies and by privately owned companies like the Wagner Group and the Internet Research Agency, the St. Petersburg troll factory that allegedly meddled in the 2016 US presidential election. The IRA was one of three

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Crucially, most of the existing Harrah’s debt did not have to be refinanced. Because it was not secured by any collateral, suddenly Harrah’s could issue senior debt backed by the company’s assets. It would do so in the LBO deal, pushing $4.5 billion of existing debt to the bottom of the totem pole in a $25 billion debt stack. This was cruel. Those existing unsecured bonds crashed in price as they were last in line to be repaid. But the maneuver allowed Apollo and TPG to issue new debt more cheaply. And it illustrated one of the key legal principles that would echo through this case: Debtholders’ relationship with the company remains strictly contractual. Any rights they have must be bargained for and embedded in documents. The management and board of a company, in contrast, have fiduciary duties which dictate that they maximize shareholder value.

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You know, Chloe, sometimes I think you're just writing lies about ancient Maine in order to mess with me... Venture capital. Collateralized debt obligations. Structured investment vehicles. This is like some occult shit. People won't read it... Asset-backed security. This shit sounds made-up! It sounds like some fake shit!

[A]lthough there are many arguments that strongly support the establishment of a national securities regulator in Canada, it is not entirely clear that the regulatory response to the ABCP meltdown is among them.

For the purposes of this book, however, the relevant question is much narrower: the issue is not whether, in general, a national securities regulator is preferable to Canada's fragmented provincial securities regulatory system. The key question, for our purposes, is this: Would a national securities regulator have made a material difference in this specific case? Framed this way, the question is much more challenging and the answer far less certain.

they’re waiting for something. Because frankly, with the assets they already have, they’re poised to take over most of the world any time. The only thing I can see holding them back is the security forces of the governments they’d likely target. Until they find a way around that, or find a way to get those forces behind themselves, we’ve got some time.

Buying mines was one way to address the issue: now Glencore’s traders would have a guaranteed flow of commodities to sell, without having to outbid their competitors to secure them. ‘I’ve always said, pure commodity trading without the assets backing up the trading is very difficult,’ Glasenberg says today.25 It was one thing to buy a few coal mines.

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BackTrack is like most Linux distributions in that it is free and open source. Perhaps its greatest asset is that it contains more than 300 tools designed to assist in security auditing.

It was the German powerhouse Deutsche Bank AG, not my fictitious RhineBank, that financed the construction of the extermination camp at Auschwitz and the nearby factory that manufactured Zyklon B pellets. And it was Deutsche Bank that earned millions of Nazi reichsmarks through the Aryanization of Jewish-owned businesses. Deutsche Bank also incurred massive multibillion-dollar fines for helping rogue nations such as Iran and Syria evade US economic sanctions; for manipulating the London interbank lending rate; for selling toxic mortgage-backed securities to unwitting investors; and for laundering untold billions’ worth of tainted Russian assets through its so-called Russian Laundromat. In 2007 and 2008, Deutsche Bank extended an unsecured $1 billion line of credit to VTB Bank, a Kremlin-controlled lender that financed the Russian intelligence services and granted cover jobs to Russian intelligence officers operating abroad. Which meant that Germany’s biggest lender, knowingly or unknowingly, was a silent partner in Vladimir Putin’s war against the West and liberal democracy. Increasingly, that war is being waged by Putin’s wealthy cronies and by privately owned companies like the Wagner Group and the Internet Research Agency, the St. Petersburg troll factory that allegedly meddled in the 2016 US presidential election. The IRA was one of three Russian companies named in a sprawling indictment handed down by the Justice Department in February 2018 that detailed the scope and sophistication of the Russian interference. According to special counsel Robert S. Mueller III, the Russian cyber operatives stole the identities of American citizens, posed as political and religious activists on social media, and used divisive issues such as race and immigration to inflame an already divided electorate—all in support of their preferred candidate, the reality television star and real estate developer Donald Trump. Russian operatives even traveled to the United States to gather intelligence. They focused their efforts on key battleground states and, remarkably, covertly coordinated with members of the Trump campaign in August 2016 to organize rallies in Florida. The Russian interference also included a hack of the Democratic National Committee that resulted in a politically devastating leak of thousands of emails that threw the Democratic convention in Philadelphia into turmoil. In his final report, released in redacted form in April 2019, Robert Mueller said that Moscow’s efforts were part of a “sweeping and systematic” campaign to assist Donald Trump and weaken his Democratic rival, Hillary Clinton. Mueller was unable to establish a chargeable criminal conspiracy between the Trump campaign and the Russian government, though the report noted that key witnesses used encrypted communications, engaged in obstructive behavior, gave false or misleading testimony, or chose not to testify at all. Perhaps most damning was the special counsel’s conclusion that the Trump campaign “expected it would benefit electorally from the information stolen and released through Russian efforts.

Principal Management Corporation, the manager of the LargeCap Value Fund, actually provides no investment management services, focusing instead on “clerical, recordkeeping and bookkeeping services.” Responsibility for the day-in and day-out portfolio management rests with a subsidiary of Alliance Capital Management, Bernstein Investment Research and Management.17 The fee arrangement between Principal and Bernstein involves only a portion of Principal’s take from its investors. For the year ended December 31, 2003, Principal’s no-load Class B shares bore the burden of a 2.51 percent expense ratio, as detailed in Table 8.7. Investors paid a 12b-1 fee of 0.91 percent, other expenses of 0.85 percent and a management fee of 0.75 percent. Principal’s fees all but guarantee that investors will fail to generate satisfactory returns. The management fee arrangement between Principal and Bernstein provides clues to the economies of scale available in the money management industry. At asset levels below $10 million, of the 0.75 percent management fee, 0.60 percent goes to Bernstein and 0.15 percent goes to Principal. As assets under management increase, Bernstein’s fee share decreases and Principal’s fee share increases. At the final break point of $200 million in assets, of the scale-invariant 0.75 percent fee, Bernstein receives 0.20 percent and Principal receives 0.55 percent. The fee structure clearly illustrates scale economies in the investment management business. Bernstein, the party responsible for the heart of the portfolio management process, earns fees that diminish (with increases in assets under management) from 0.60 percent of assets to 0.20 percent of assets. Since Bernstein’s work changes not at all as asset levels increase, the reduction in marginal charges makes sense. It makes no sense that Principal’s mutual-fund clients accrue no benefits from economies of scale. Total expenses incurred by investors remain at 2.51 percent regardless of portfolio size. As Bernstein’s management fee declines, Principal’s management fee increases. For assets above $200 million Principal adds a management fee of 0.55 percent to other fees of 1.76 percent, bringing the egregious total to 2.31 percent for Principal and 0.20 percent for Bernstein. In this topsy-turvy world, Principal earns a marginal management fee of 0.55 percent for performing back-office functions, while Bernstein earns a marginal management fee of 0.20 percent for making security-selection decisions. As scale increases, Bernstein earns less while Principal takes more.

The Global Financial Crisis of 2007–08 represented the greatest financial downswing of my lifetime, and consequently it presents the best opportunity to observe, reflect and learn. The scene was set for its occurrence by a number of developments. Here’s a partial list: Government policies supported an expansion of home ownership—which by definition meant the inclusion of people who historically couldn’t afford to buy homes—at a time when home prices were soaring; The Fed pushed interest rates down, causing the demand for higher-yielding instruments such as structured/levered mortgage securities to increase; There was a rising trend among banks to make mortgage loans, package them and sell them onward (as opposed to retaining them); Decisions to lend, structure, assign credit ratings and invest were made on the basis of unquestioning extrapolation of low historic mortgage default rates; The above four points resulted in an increased eagerness to extend mortgage loans, with an accompanying decline in lending standards; Novel and untested mortgage backed securities were developed that promised high returns with low risk, something that has great appeal in non-skeptical times; Protective laws and regulations were relaxed, such as the Glass-Steagall Act (which prohibited the creation of financial conglomerates), the uptick rule (which prevented traders who had bet against stocks from forcing them down through non-stop short selling), and the rules that limited banks’ leverage, permitting it to nearly triple; Finally, the media ran articles stating that risk had been eliminated by the combination of: the adroit Fed, which could be counted on to inject stimulus whenever economic sluggishness developed, confidence that the excess liquidity flowing to China for its exports and to oil producers would never fail to be recycled back into our markets, buoying asset prices, and the new Wall Street innovations, which “sliced and diced” risk so finely, spread it so widely and placed it with those best suited to bear it.

Asset-backed securities involve a high degree of financial engineering. As a general rule of thumb, the more complexity that exists in a Wall Street creation, the faster and farther investors should run.

Invest in experiences not things. Surely, build an asset and savings base for a rainy day. But don’t kid yourself thinking you are really ‘secure’ and ‘settled’ just because you have money. Anything can happen in Life – that too, in a nano-second! Besides, as you age, you will realize that what you can do when you are 20, you really can’t do when you are 40! Which is why, invest in experiences, in doing what you love doing. Your experiences shape you. They intricately weave your learnings from each experience with your idea of Happiness to create a beautiful fabric that stays in your subconscious even when people and things around you perish over time. In the end, what will count most in your Life, are who you loved, how you were loved back and how you enjoyed doing all that you loved doing!

Ever heard of collateralized debt obligations? Mortgage-backed securities? Non-bank asset-backed commercial paper? What about income trusts? Or even mutual funds?

RT had paid him $45,000 for his appearance. His colleagues had warned him that taking Kremlin gold would fatally compromise him, and they also thought that he didn’t care. (Flynn’s twenty-seven-day stint as Trump’s White House national security adviser ended after he lied to the FBI about his conversations with the Russians.) Stein said her campaign paid for her trip to Moscow, but RT paid her back. It ran more than one hundred stories on its American channel supporting her bid for the White House, amplifying her positions—“a vote for Hillary Clinton is a vote for war”—which reliably corresponded with the party line of the Internet Research Agency. “She’s a Russian asset—I mean, totally,” Clinton said three years after the election, an intriguing and incendiary charge.

• Loads are sales charges that kick in when you buy (front-end load) or sell (back-end load) open-end mutual fund shares. • Expense ratio refers to ongoing fees for the fund, which range from 0.09 percent to more than 3 percent; lower fees are associated with index funds, higher fees with managed funds. • Minimum investment requirement for open-end funds typically ranges from $500 to $3,000 for the initial investment only. • NAV (net asset value) equals the total current value of all assets held by the fund minus any outstanding liabilities divided by the total number of outstanding shares [(assets – liabilities)/shares].

on November 17, Hull received a telegram from Ambassador Grew “emphasizing [the] need for guarding against sudden military or naval actions by Japan in areas not at present involved in the China conflict.” Grew added that security had become so tight in Japan that “military and naval observation is almost literally restricted to what can be seen with our own eyes, which is negligible.”131 Supported by Acheson and his asset freeze, and despite Grew’s warnings, Hull still thought that the Japanese would back down.132

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