The Credit Crisis of 2007 & 2008

What is going on in the financial markets? How did we get here? Where are we now? And where are we going from here?

Managing Director Philip Clements wrote a paper to address these questions. It begins by creating the understanding of truth and one’s ability to ignore truth and principles in the decision making process, including experts in the market. It then progresses to a brief explanation of the financial innovations developed over the last thirty years, including securitization, creative mortgages, derivatives, short-selling, and speculative investing. This understanding permits us to see how we have arrived at our current situation.

Based on the principles and innovations outlined, observations are offered on the current market and companies such as Bear Stearns, Citigroup, Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch, AIG, Morgan Stanley and Goldman Sachs. The paper concludes with some observations for the future.

Click below to read and print the entire article in PDF.