Right on. However, the issue with Herbalife may be a little more complex for there is a unique situation going on even today with a failure of American regulators to enforce the laws, and even to issue confusing and contradictory guidelines. To this day websites of SEC, FTC, and several state AGs make a distinction between a "legitimate MLM" and a pyramid scheme. Thus regulators have created and maintained the confusion that allows the fraud to continue. Legally things are relatively clear, when the money is made from recruiting not sales, it is a pyramid scheme, and in that light all MLMs are simply pyramid schemes dressed up to create the impression of being real businesses. Presently there are some signs of new interest at SEC (formation of a new task force to combat pyramid schemes), and FTC a forum disussion about how Fraud Affects Every Community, and they are taking the show on the road... in short the abuses of the industry may finally have risen to the level that a sorting out of fuzzy policies of the past may start to take shape. The deterioration at HLF, along with issues at other MLMs, Avon, Usana, NuSkin, and Vemma (banned in Italy for being a pyramid scheme), are all economic /financial indicators that the time to take pyramid scheme regulatory risk for all MLMs seriously has come.

Amen. It is actually even worse than is suggested here. The systems seems to prefer relaxing underwriting standards, but instead there is an imperative that could support asset values, as I've suggested here: seekingalpha.com/.../2545175-fhfa-single-security-structure-and-the-future-of-fannie-and-freddie

Energy is in the process of becoming the single most important vector of real estate valuation, and we have not even begun to deal with that fact, but the energy hogs of the past are becoming the slums of tomorrow, and that trend will accelerate, even with the current breather of low oil prices, which will temporarily mask the crisis.