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Milken a director of the Bank Drexel Burnham Lambert was known as the inventor of junk bonds. What he was looking for was coverage for financial instruments, that were bundles of government securities, which were far from secure and meant to be sold on the secondary Market. The securities he bought for little money from insolvent countries, such as Argentina and diced them along with government securities of countries that were not yet broke. These packages, called junk bonds, he sold at inflated prices convincing investors of large profit prospects. Inside the bonds hold huge margins and commissions and Milken was of the opinion, that the inherent risks were of political nature, as we were dealing with sovereign debt. Therefore he was looking to the Political Risk Market and found Cayzer Steel and me - so he had found me, he said. For me it was a contact with another world, a world in which Fortunes were won and lost on a daily basis. Milken himself, so I read later, earned the modest sum of US $ 550 million a year - which put him in a different league - a league in which arrogant expectations were justified. I had to have a go! It smelled of the big money and John and I drank the next day at lunch considerable amounts of Burgundy in ecstatic expectation, as Lloyd's Brokers do in a situation like this as they are always full of irrepressible optimism.
"Did not know that you are so familiar with the dubious circles of the Financial World"
John said as Harry returned to the company.
"That's comes with my excellent reputation,"
I answered modestly and told John of the proposal.
"You have to fix that deal so that I go on a Cruise"
Were Johns' words, as the full dimension of this outlandish proposal started to sink in.
A "windfall profit" was to be expected.
But as hard as I tried, the Insurance Markets didn't play. There was a deep and in fairness justified distrust in the dealings of the financial world. They never worked for the insurers and the winner was pre-determined. In the end I gave up. The disappointment was great and called for several more rounds of Burgundy to bury the pain and pave the way to return to normal.
A few years later I read that in 1989 the New York District Attorney Rudolph Giuliani, had Milken indicted in the federal court due to financial fraud. Although this did not result in conviction, Milken agreed upon further and persistent investigation, to confess in five points guilty and to pay $200 million in fines and a further 400 million dollars on compromised settlements. Well, that was just a little more than his annual salary. Milken had been ahead of the time.
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