16 Comments

1. POSTED BY Kit Schackner  |  April 19, 2010 @ 1:16 pm

   I am fascinated by the Goldman Sachs lawsuit. Schadenfreude maybe? From all that I’ve read about it today, I’m not the only one feeling like this.
   I loved Matt Taibbi’s quote about Goldman Sachs last year in Rolling Stone:
   “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
2. POSTED BY Conan  |  April 19, 2010 @ 1:30 pm

   I am currently reading the new Michael Lewis book “The Big Short — Inside the Doomsday Machine.” At first, I could not believe that anyone, let alone top Wall Street financiers, could be that stupid to embrace some of the debt instruments of which they had no understanding and which greatly precipitated the meltdown. I thought that their “we didn’t know” pleas were horse puckey and that they were just goniffs who would steal the pennies off their dead mothers’ eyes. Then I read this book and I became convinced that they were that stupid! But when I heard about the Goldman Sachs thing Friday, where they are accused of purposely selling doomed securities to make another customer (a hedge fund no less) filthy rich, I now believe that — all stupidity aside — they are mega-goniffs and they should all go to jail and play “Bingo with Bernie.” Unfortunately, the SEC has no teeth and they will probably pay a couple of billlion in fines (out of petty cash) and go back to business as usual. And, I watched Mitch McConnell Sunday say that Obama’s bill to oversee the banks would just cause more bailouts. Mitch! Wake up! Smell the coffee! The thievery needs to be stopped, and anyone who wants to align themselves to big Wall Street banks is gonna get some of the stuff that is hitting the fan on their clean, white suits.
3. POSTED BY Spiro T. Quayle  |  April 19, 2010 @ 1:47 pm

   Allow me to put my militia costume on and declare, with my gun over my shoulder:
   “get that socialist government off my back – if I’m a-gonna get screwed, I want a big ol’ business, not a big ol’ government, to do the screwing.”
4. POSTED BY Conan  |  April 19, 2010 @ 2:11 pm

   I lived in the South for about two decades, off and on, and I met a lot of working-class people who were existing — and not very profitably — from paycheck to paycheck, yet they were almost all Republican, all anti-liberal, all anti-big government, and right-wing down the line. I tried to explain to them that their own party was just screwing them to the wall to provide outrageous wealth for the top 1% of the population, but they wouldn’t belive it. Or maybe they thought someday they would be part of that 1%. Fat chance.
   I am hearing more about how the Tea Party is bi-laterally anti-government, not just anti-liberal, but I a not swallowing that one yet. I just hope that everyone who is standing up on their hind legs (some with help, of course — that would be you, Mitch) and screaming “NO, NO, NO!” hears the ka-ching of the ballot box when they get dumped out of office.
   My name is Conan, and I approve this message.
5. POSTED BY cathar  |  April 19, 2010 @ 3:24 pm

   Again with the cliches, Spiro? Really, there’s no percentage in attempting to channel Keith Olbermann or Rachel Maddow. Like both, you imagine yourself wittily incisive. Like both, you are clearly much mistaken.
   And you are already “in costume.” It does not fit you well, either.
   Matt Taibbi, for all his needless resorting to profane language (as per usual for him, are they so afraid to edit him over at Rolling Stone?), ably and comprehensively summed up the case against investment banks and bankers in general in the last issue of RS. I now finally understand that to hear one’s offspring speak of investment banking as part of his or her career plans should be an immediate plunge into righteous despair, as well as a chance to truly wonder if one’s own flesh is so devoid of morals and anything appoaching a conscience.
   Sadly, however, I keep running into people who seem proud that their Jacobs and Ashleys and Conors and Heathers are in fact involved in investment banking. But there seems to be other legal trade out there which contributes so little to the common good.
6. POSTED BY CuppaTeaGirl  |  April 19, 2010 @ 3:39 pm

   I am so flabbergasted by this volcano eruption. I work in publishing and was supposed to fly on Saturday to a major book fair in London taking place this week. Obviously, my flight was canceled and I couldn’t go. I wasn’t the only one, though–every single one of my appointments with a non-UK publisher was canceled; no one else could fly into London, either. Pretty incredible. The fair is still being held this week, though I hear those who made it there are spending most of their time at the bars since none of their appointments could make it. I’m pretty bummed that I didn’t get to go to London (which I was looking at as a vacation, as well as a business trip), but I’m really glad I didn’t have to worry about battling an ash cloud over the Atlantic. Am also glad that I didn’t get stuck in another country, waiting indefinitely to head back home. Eeks.
7. POSTED BY mhs1987  |  April 19, 2010 @ 4:35 pm

   Why is it that the least informed always scream the loudest? Neither Kit nor Conan have any idea how clueless they are. Perhaps you should speak to a friend who actually works with mortgage-backed securities instead of reading a BS article by Matt Taibbi who knows nothing but his agenda and Mike Lewis who worked on wall st. all of one year. I know there are many in Montclair and many more in Manhattan. The bottom line is that these securities were not misunderstood nor were they “sold” to anyone who didn’t want them. These types of securities were in the highest of demand and although they were AAA rated crap, they continued to appreciate in price – not dissimilar or unrelated to the housing bubble. People bought houses they knew were only worth $500k, but since they fig’d they could flip em for $700k it seemed a worthwhile risk…until it wasn’t.
8. POSTED BY Spiro T. Quayle  |  April 19, 2010 @ 4:35 pm

   Dear old cathar,
   I am pleased that you have such an aversion to cliche. You should talk to that patriot sporting a shaven head and goatee, you know, the one in the photo gracing the news wires today.
   You might wish to take him aside and offer some avuncular advise with regard to his handwritten poster -the one that says “Marx Lenin Stalin Obama Pelosi Reid”. Let us know how it goes, if you have any teeth left after your friendly chat.
9. POSTED BY Mike91  |  April 19, 2010 @ 4:53 pm

   The bottom line is that these securities were not misunderstood nor were they “sold” to anyone who didn’t want them.
   What Goldman Sachs is in trouble for is not disclosing that the hedge fund that helped choose the portfolio of investments in the product had a short position on that product. I doubt that the buyer of that product would have ‘wanted’ them if they knew what the odds were.
10. POSTED BY cathar  |  April 19, 2010 @ 8:04 pm

    Oh, I’ve been hit before, Spiro T. I unfortunately know how to take a punch (though it’s been 20 or so years since a good one).
    Yet I remain amused that you don’t like even a verbal love tap. It is always ok in your “enlightened” world view to belch out the most obvious cliches about conservatives. But when someone dares point out how lame your own comments always really are, you bristle mightily. It’s quite obvious above, for example, that you’re just, well, pouting. And not for because your ice cream cone is melting, either.
    My suggestion is that, no matter how hard it may prove for you, you simply try to grow up. (Frankly, even your posting name is pretty bad.) Because you’re just not as cuttingly wry here as you seem to imagine yourself, for all the cliches and media-bound typifications you manage to clump together on even a slow posting day for you here. You might also try and get a sense of humor about yourself and your verbal limitations, there’s a good chap.
11. POSTED BY Conan  |  April 19, 2010 @ 10:33 pm

    “Why is it that the least informed always scream the loudest?”
    I am forced to agree with you.
    “I know there are many in Montclair and many more in Manhattan.”
    Many more what?
    “These types of securities were in the highest of demand and although they were AAA rated crap, they continued to appreciate in price…”
    Fools rush in where thieves never fear to tread.
    ” People bought houses they knew were only worth $500k, but since they fig’d they could flip em for $700k it seemed a worthwhile risk…until it wasn’t.”
    And they paid what?
    “Why is it that the least informed always scream the loudest?”
    Beats me…
12. POSTED BY elnino  |  April 20, 2010 @ 10:02 am

    The term “GS”, now entering the popular lexicon as a verb, meaning to lie AND make money from doing so, as opposed to “BS” – which is just to lie without the benefit of compensation.
    -Richard Ambrose
    ~~~
    There once was a man named Tourré
    He toiled for The Squid night and day
    At Paulson’s request
    He created a mess
    And sold it to bank IBK
    -Joshua Brown
    ~~~
    Burning Documents Create Giant Smoke Plume over Goldman Sachs
    –Andy Borowitz
    ~~~
    With apologies to John Collins Bossidy
    And this is good old Gotham,
    The home of the rich and the odd.
    Where Morgan talks only to Goldman,
    And Goldman talks only to God.
    -Andrew Stanton
13. POSTED BY cncrnd  |  April 20, 2010 @ 12:53 pm

    Here is a description of the Goldman Sachs (GS) trade in a nutshell:
    First, in 2006 GS, took a firmwide negative view of the housing market, that is, they began to take steps to dramatically reduce the firm’s exposure to it’s multi-billion inventory of mortgage backed securities (MBS) that it carried on it’s balance sheet. As a major dealer in the market for MBS, GS profited both from the interest that this trading position earned for them (positive carry), and it enabled them to make active markets for investors that were interested in either buying or selling such securities. Dealers routinely offset market exposure through hedging, selling a similar security vs one held.
    The problem at the time was that the MBS about which GS had the greatest concern were of the now well known Subprime variety. The bugaboo was that unlike traditional GNMA, FNMA, FHLMC securities which were highly liquid and easily sold or hedged, no natural hedge existed for the Subprime bonds; therefore, a hedging vehicle needed to be created. The community of Wall Street Dealers came to an agreement on a type of synthetic structure that essentially mimiced the characteristics of the soon to be problematic Subprime bonds. This structure was called a Pay As You Go (PAUG) Credit Default Swap (CDS). Now Wall Street firms, or anyone else that met market sophistication and financial criteria could, for the first time, express a negative view of the market relatively cheaply, and they did.. in size.
    Lets remember that this was during a period where, although delinquencies were rising, the individual securities were still outwardly performing well. Firms with a direct exposure to mortgage creation had reams of data that even the most scrupulous and sophisticated investor had no real access to, but could only devine from data provided from originators and the same Wall Street firms that were interested in getting these assets off the books, pronto. The data investors were getting was often misleading or incomplete, which in no small way contributed to their continued appetite to buy bonds.
    These troublesome bonds were most efficiently packaged and sold to investors in the form of structured credit vehicles called Collateralized Debt Obligations (CDO’s). CDO’s incorporated these assets and placed them smaller bonds (tranches) within the structure that carried ratings from AAA to unrated Equity.
    Traditional CDO’s were issued by a recognized money manager as a sponsoring entity. The CDO manager assembled the collateral, paid the issuing dealer significant fees for marketing, etc., received a nominal running fee (
14. POSTED BY Spiro T. Quayle  |  April 20, 2010 @ 1:32 pm

    Nonetheless, the Wall Street Journal editorial page today tried their best to defend GS, basically stating they were not as bad as some other players. Damning by faint praise.
15. POSTED BY cncrnd  |  April 20, 2010 @ 1:35 pm

    As they say, “There is never just one cockroach.”
16. POSTED BY PAZ  |  April 20, 2010 @ 6:30 pm

    Happiness just died
    As the sun burned through the mist
    Blue bird hits window

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