5 Scams That Shook the United States

5 Scams That Shook the United States

5 Scams That Shook the United States

 

If there’s one thing every American would desire the most, it is peace. We all want to be surrounded by honest individuals and live our lives in an orderly fashion. Unfortunately, it’s not that easy. In the words of the famous Rocky Balboa: “The world isn’t all sunshine and rainbows. It’s a very mean and nasty place…”. This definitely holds true when we talk about the biggest scams that took place in the USA.

The Original Ponzi Scheme (1920)

Charles Ponzi had realized that he could purchase coupons at a discount and then sell them abroad at full quoted price. He had asked many people to invest in this business of his. Where’s the scam, you ask? Ponzi exaggerated the profit to the investors. Instead of the 5 percent they would make, Ponzi told them they would make 50 percent. They all came running. All Ponzi did was pay off an investor from the money he’d collect from the subsequent one. When this scheme came to an end, people had lost about ten million dollars.

Lehman Brothers

Lehman brothers was an organization which provided global financial services. In fact, it was the 4th largest invest bank in USA before it filed for bankruptcy in 2008. With $639 billion in assets and $619 in debt, Lehman Brother’s bankruptcy was perhaps the biggest there had ever been. Around 26,000 people lost their jobs and millions of investors had to face severe losses.

Bernard Madoff

This is another case of a Ponzi scheme. In fact, the largest one. This is known as the largest fraud ever by an individual. In 2008, Bernard “Bernie” Madoff told his sons about the $65 billion Ponzi scheme that he had been pulling off.  Even the SEC failed to unravel the fraud. When it blew up, Bernie was sentenced to 150 years in prison. However, for the investors, a wave $18 billion in losses wall street by a storm.

 

The Enron Bankruptcy

Enron, an energy company, had been doing a phenomenal job went it came down to generating revenue, or at least it made the world think so. Named the “most innovative company” by the fortune magazine six years in a row, employing as much as 22,000 employees, Enron had misrepresented its substantial profits and revenue to the world. When this company came to an end in 2001, the investors faced a loss of $74 billion.

Kenneth Lay, the founder of Enron, and Jeffery Skilling were both fined heavily. Skilling was sentenced to time in prison while Lay died waiting for his court sentence.

WorldCom

Bernard Ebbers was the CEO of WorldCom, the second largest telecommunication company in the united states of America at the time of its peak success. Ebbers made false representations of the company’s assets and even exaggerated them by $11 billion. When this broke down, the WorldCom stock dropped from $64 to about $1. This collapse caused about $100 billion in losses for the investors.

 

Conclusion

What do you think about all these scams? Let us know in the comment sections below. Check Our Reviews page for more insight into trusted companies. Check our site for reviews of all kind. It’s great place to become more knowledgeable about the world of finance, and will shed some light on some of the scams out there. Check out the previous post by clicking here.

Countries That Will Overtake The U.S. Economy by 2050

Countries That Will Overtake The U.S. Economy by 2050

The USA has long been the King when it comes to the global economy. With a GDP greater than some countries like China and India, you would think they have locked in their position, and will never be knocked off their throne. Per a Report by Price Water House, the global economy is expected to double by 2050. So, what does that mean for the USA? Will they reign supreme decades from now? Well, the data suggests otherwise.

In 2030 China, which is currently second on line to the throne is expected to overtake the American economy by. That’s not all though. Eventually the USA will be knocked down another peg by the year 2050 Well if the predictions by Price Water House turns out to be accurate, India will come in second to China, with the U.S. rounding out the top three.

John Hawksworth, chief economist at Price Water house said, “By 2050 we project China will be the largest economy in the world by a significant margin, while India could have edged past the US into second place and Indonesia have risen to fourth place.”

On a different basis, like the PPP, Indonesia is expected to have a significant jump from the eight to the fourth largest economy in the world. Brazil is also expected to make a jump from seventh to fifth. Japan however, is expected to fall from fourth to eighth, Germany from fifth to ninth and the U.K. from ninth to 10th. France is expected to be bumped out of the top 10 completely.

The trend of moving away from established advanced economies, like many countries in Europe, and looking towards emerging economies in Asia and elsewhere is something we will begin to see. Countries like Brazil, China, Indonesia, Mexico, Russia and Turkey will see average annual economic growth hit nearly 3.5 percent over the next three decades and change.

“This shift of global economic shift in power will largely be driven by China and India. The report said. “For the advanced economies, growth is projected to be much lower on average compared to the emerging economies between 2016 and 2050.”

PwC ends it’s report by stating these results are more of a potential outcome rather than what “will” happen, saying that the world is “entering a period of considerable political, social and economic uncertainty.”

“Of course, we should not dismiss political shocks like Trump or Brexit to the extent they point to deeper structural shifts, notably a populist backlash against globalization, automation and the perceived impact of these trends in increasing income inequality and weakening social cohesion,” Hawksworth said. “These trends pose real policy challenges across the developed world and beyond and … there is no silver bullet to address these concerns.”

 

Conclusion

What do you think about this report? Let us know in the comment sections below. Check Our Reviews page for more insight into trusted companies. Check our site for reviews of all kind. It’s great place to become more knowledgeable about the world of finance, and will shed some light on some of the scams out there. Check out the previous post by clicking here.