A Decade of Delusions: From Speculative Contagion to the Great Recession

Chapter 6

Only Fools Rush In1

Source: © FactSet Research Systems.

The Rogues Gallery, 2003 Vintage

Early 2003 provided a somewhat unexpected respite from the plethora of deplorable corporate disclosures in 2002, which included the WorldCom debacle, where megalomaniac Bernie Ebbers and his apparently dumbstruck board recklessly leveraged WorldCom into the largest bankruptcy in American history. In the professional service sector, the once proud but ultimately disgraceful bust of Arthur Andersen was beheaded by its own sword. These are but two of the more conspicuously reprehensible examples. Momentarily taking center stage, the public relations and military buildup preceding the blitzkrieg in Iraq on March 19, 2003, commandeered the headlines during the first quarter.

Wall Street was back in the limelight on April 28, when a historic $1.4 billion settlement was reached between the Securities & Exchange Commission and 10 Wall Street firms for their fiduciary misconduct during the Bubble days when business ethics were conveniently suspended and the lust for fool’s gold made a mockery of morals. Of course, no firm or individual has admitted guilt, continuing a ritualistic dance of “repentance” that takes place between the SEC and the accused, wherein the “not guilty” parties are more than willing to cough up the cash to burnish their tarnished reputations—or at least sweep their ...