27 February 2007 is not a date that stands out. It is not indelibly imprinted on the minds of millions; it does not carry the pain or notoriety of 9-11; unlike 'Black Wednesday', it has not been nicknamed Nor, like 31 August 1997, The Day Diana Died, did it send a nation into mourning.
Yet the repercussions of this day are, quite simply, enormous. They may be felt for decades, and possibly mark the beginning of the next Great Depression. For this was the day the greatest credit bubble in history peaked and popped.
And one man predicted this turn as far back as the 1970s. He is Martin Armstrong.
What's more, another one of his turn dates is coming this weekend …
Martin Armstrong's story reads like a thriller. He was a globe-trotting and extremely contrarian investment manager, who in the late 1990s was accused of misappropriating Japanese investors of some $700 million in some kind of Ponzi scheme.
It appears that, like Nick Leeson, the money was lost on bad bets in the currency markets and losses were being concealed, though Armstrong said he did not authorise the trades. Nevertheless, he was indicted in 1999 and ordered by Judge Richard Owen to turn over gold bars and antiquities, which he is said to have bought with his firm's money, as well as computers and documents.
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Armstrong delivered four of the five computers sought, eight of the 11 requested boxes of documents and gold coins worth $1.1 million. The receiver said assets worth about $15 million were missing; Armstrong insisted that was all he had. Judge Owen – revisiting the order every 18 months - held him on contempt of court for some seven years, some kind of record for time in prison without trial. Nevertheless, Owen repeatedly held that Mr. Armstrong was motivated by greed and was awaiting his release from jail to retrieve the $15 million that the government said was missing.
Mr. Armstrong's years in jail for civil contempt match the sentence of six-and-a-half to eight years that he would have received if he had been convicted of all 24 criminal counts of securities fraud, commodities fraud and wire fraud. But in late 2006, after appeal, Judge Owen was removed from the case. In 2007, after a period in solitary, Armstrong faced trial, pleaded guilty and is now serving a prison sentence for a further five years.
