This is a detailed description of the Orange County bankruptcy in December 1994. It analyzes the technical details of the portfolio and the politics, both public and private, that led to the bankruptcy. In addition to covering the US bond market and Federal Reserve Chairman Greenspan's efforts to tighten credit, this work describes the climate in Orange County municipal government that encouraged the decisions that led to the bankruptcy. Questions discussed include: how can a municipal investment pool, which is supposed to be safe, lose billions of dollars?; what are derivatives?; and why did they cause this tragedy?