The Paul Krugman article article about the ltcm affair which Mike Gurstein posted induced a bit of deja vu in me. Was much reminded of information that came out about the financial diseaster of the S&L failures. One way in which the unsavory types who had taken control of so many of these banks (no need to quibble over semantics here) was to for what were called "ring around the rosie" groups. A member of the informal group would take out a loan to buy a piece of land for, say, $25,000. The S&L would apprise it for that. The next member would buy it for $50,000 with the loan approved after solemnly going thru another appraisal process. After the price had been up to a few million via a series of sell/buy cycles, the merry little band members would be quite flush. Initially i was under the impressio that the last guy got stuck with bankruptcy so that the others must have made him whole out of sight somehow. However, a "60 Minute" show explained how this worked. The piece included interviews with some of those involved. The culprits never signed anything - they left that to assistants or lawyers. In other words, the crooks had figured a way to rip off the taxpayers in a perfectly legal manner. There were exceptions to be sure but my perception was that the crooks tended to be from the south or lower midwest. In other words, on a geographic basis, there was a massive capital shift from the north to the south. Since many in the southwest believed that their areas tended to be virtual colonies of the north, there may have been a certain perverted justice involved, a kind of jubilee year. Jerry
