Nobody knows has the biggest financial crisis already occurred during the phase of 2008-2009 or it is about to come in the near r-OWS-large570future .Was reading the mess from Jack and Suzy welch, who recall Agatha Christie’s murder on the Orient express. In his novel 12 people were suspected of murder and 12 turned out to be guilty in the same way he represented 12 murderers of the US financial system.

1.   The Federal Reserve Board.  :    The Man behind here is Alan Greens pan Fed governor in 1987-2006 a serious bubble maker. Introduction of Fannie mae and Freddie mac

2.      Financial innovators:   Securitization, CDOs, CDS,

3.      Regulators:   Regulators for banking, insurance and financial stock markets were sleeping, none of them checked the growth of CDS market.

4.      Banks and mortgage lenders.   :  Instead of keeping loan on there own books, they repackaged them and sold them , KYC norms were in the air, Banks provided NINJA loans  no  verification  of income, jobs or assets another important concept Teaser loan slow starting interest rates, which reset at much higher levels in later years —    to lure unsuspecting borrowers.

5.       Investment banks:  leverage of up to 30 times,  all five top investment banks have disappeared. Lehman Brothers is bust, Bear Stearns and Merrill Lynch have been         acquired by banks, and Morgan Stanley and Goldman Sachs have been converted into regular banks.

6.      The Basel rules for banks :   Basel II allowed banks to use credit ratings and models based on historical record to lower the risk-ratings of many securities

7.       US consumers. :   Savings use to be 6% of disposable income in the past but more recently 0 or even negative.

8.      Asian and Opec countries:   Undervalued there currencies to stimulate exports and created large trade surplus with the US.

9.       Everybody:   Everybody liked easy money and rising asset prices. Valuations were wavered, this trumped prudence across countries.

Have not considered the European crisis while writing the above.