Many years ago I worked on Wall Street. As CFO of a large insurance company it was my job to collateralize $1 billion in deferred cash flow Fortune 500 insurance programs - typically with letters of credit. In a constant search for a competitive edge to fight the dark force i.e. AIG, I spoke with an investment banker who suggested we look at securitization of client obligations.

I duly visited with the Securitization Guru in his mid-town lair - this was Gordon Gekko times and everyone had slicked back hair and power suspenders, minions tapped furiously on computers (it was so long ago - maybe it was abacii - but you get the point), and $2,000 cell phones with separate 5 lb battery packs were the status symbol.

The securitization guru explained how we would securitize the obligations, using a Special Purpose Vehicle, multiple tranches, Rating Agency Blessing and then package the obligations for resale. My reaction was:

a. This is way too complicated, and will never work

b. The fees are astronomic and are all up front. No one would do that.

c. The regulators will never buy it.

Turned out that I was wrong on all counts - but I decided to take a pass anyway. AIG continued to take business away from us. Well...it sure took a while for vindication.. but in hindsight I think I made the right decision.

Fast forward 20 years and to paraphrase Joe Kennedy , "even the shoe-shine boy knows about securitization." Lessons?

1. Never pay the deal maker up front.

2. Never do a deal unless you understand it in excruciating detail.

3. If they say it's risk free ... head for the hills.

4. Never wear yellow suspenders - you will look stupid in 5 years.

And to see what we have wrought..here is an prophetic warning about the Financial Meltdown . I first saw this video at the May 2nd, 2008 Berkshire Hathaway shareholder meeting.