I just got done reading the SEC document, pertaining to its lawsuit versus Goldman Sachs, and I’ve been laughing– rather hysterically–ever since. I’m not going to name names, because that’s not what I do. But, some of you finance bloggers out there just don’t get it.
Yeah, “Fabulous” Fabrice Tourre is a scumbag of monumental proportions; but that’s the business. Eighty five percent (give or take) of all the brokers, investment bankers and big deal makers out there are embedded in deeply rooted, flawed, scum bag personality traits, that can only be corrected via death. Look, I don’t see what the big deal is about John Paulson helping to creating the product, just because he intended to buy insurance against it. Who the fuck was he, prior to 2008? Sure, he was successful, just like a multitude of other hedge fund managers. But, it’s not like the guy was fucking Merlin, or some sort of space alien magician with crystal balls coming out of his ass. If the game was prolonged a little longer, Paulson would have looked like a fucking first rate jackass, getting poleaxed on a bunch of CDO’s. It just so happened that he was right, with the idea and timing. Do you know how many hedge fund managers get wiped out, betting one way, because their timing was off by a few months?
And, it’s not like Goldman or ACA was marketing the fucking products to 85 year grandmothers. They were selling these products to sophisticated investors, who know how to read a fucking balance sheet. It should not matter, not one fucking bit, that Paulson was intending to take a short position. Who gives a fuck?
When I go out and buy Fuel Systems Solutions, Inc. [[FSYS]] , I do so knowing that there are 1,000 guys out there, just like Paulson, that are betting against me. That’s Wall Street, gentlemen. That’s risk.
As far as I am concerned, the SEC should sanction the Fabulous guy, ding Goldman a few mill for not properly supervising him, and the rest of the ordeal should be hashed out between the banks. Let ACA and the other institutions file lawsuits against Goldman. Doorknobs to donuts, any judge in his right mind would say “you are a sophisticated investor and are supposed to understand the inherent risks associated with the products you buy on behalf of your shareholders/customers” aka fuck off.
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indeud fig
I hope that SEC realizes that when one investor buys stocks, theres someone else selling it right? lol
exactly.
yeah, even though when it is big firm doing the buying or selling, they have endless supplies of cash to do their bidding.
guys like hank and sandy and yes greenspan set the stage for guys like blankfein to take the ball and run. He’s a trader by nature, not a n old school ceo.And he ran it ruthlessly and brilliantly. GS gets a slap on the wrist. obama’s number go up (how much did GS give his campaign for pres?) And anybody with half a wit will throw new money at this company – what a great advertising campaign they got off this for free.
How does “Fabulous” Frenchy match up against “Ghetto Fabulous” ?
Ghetto Fab would have not bothered to deceive anyone. He would have straight force fed it down the throats of ACA, mainly because he is “Ghetto Fab.”
GS’s reply to the charges were not the typical speak you hear in cases like this. There seemed to be a lot more disclosure than usual. When something like this breaks, the accussed party’s lawyers will issue a mostly vague blanket statement basically saying “We’ll save all the rhetoric for court.”
Not this time. GS’s statement was like a an instructor in the first day of “Investing 101” stating the very basics of the system and how things work. I mean when they come out and say shit like “For every trade there has to be a buyer and a seller.” they are really thumbing their noses at the SEC for being a bunch of grandstanding bitches. Then the last bit about investment banks don’t normally disclose the identities of those on each side of the trade was also a big middle finger to the SEC. In all their statement sounded like they were asking the SEC “What color is the sky in the world you live in?”
You also got to think Warren Buffet is none too pleased with the government shitting all over one of his bigger investments. Might make things a bit touchy the next time there’s a financial meltdown and everybody comes running to him to instill confidence. He might just tell them to fuck off.
GS and Ghetto Fab… just keepin’ it gangsta.
Sanctioning the fabulous guy reminds me of 3:05 of this Dave Chappelle clip.
Ghetto Fab now runs the fixed income trading desk for these guys:
http://www.comedycentral.com/videos/index.jhtml?title=wu-tang-financial&videoId=11887
no balls no babies
Regarding the SEC filing, it sounds flimsy at best. The strongest point made against GS was the part reading:
the hedge fund equity investor wanted to invest in the 09% tranche of a static mezzanine ABS CDO backed 100% by subprime residential mortgage securities.
Yes, that comes across as misleading; but did GS ever specifically say Paulson was long? This is one that the lawyers will debate and who knows how a jury will interpret the wording? Basically if you think shorts are not “investors” then you would consider the statement definitely misleading. But every transaction requires a buyer and a seller. Are sellers not investors?
Also, this was all done in 2007. Paulson was a relative unknown at the time. ACA probably thought the guy was nuts and if he was willing to throw his money away they would be more than happy to collect it. Well, Paulson was right and ACA / IKB were wrong. Tough shit assholes.
After reading through the whole thing, my opinion is if anyone should be charged it should be ACA. One of their guys even asked why the portfolio selected by Paulson deleted the Wells Fargo securities, but they still went ahead with approval. To me it sounds like Paulson did better DD than all the rest. As such he deserved to “win”.
Wow, apparently Timmah doesn’t agree with my thoughts. Shocking, no?
I personally have always believed Goldman Sachs was the most corrupt enterprise in the United States. There are many other crimes, I suspect, that will be revealed during what is sure to be a kick-ass discovery process. I only hope this little dagger begins an entire series of assaults upon the organization which eventually drive it to ruin and bankruptcy. I would also like to see Blankfein and his co-conspirators put to death for treason against the United States. They are an evil, crooked bunch.
The part in bold is especially disturbing. Dude done gone and lost his mind… up in here, up in here. Things are going to be quite entertaining this weekend.
http://slopeofhope.com/2010/04/the-fall-featured-in-schlomo-motion.html
Exactly Monsieur Le Fly !
I question the fraud (by the SEC/FED) in the timing of the rally killing news release. The day after taxes are due and the checks are already in the mail… not to mention on opex Friday.
Hedge fund manager in Goldman Sachs case is major Dem donor
The billionaire hedge fund manager at the center of an alleged fraud hatched at Goldman Sachs, a leading investment bank, has given tens of thousands of dollars to both parties.
Campaign fundraising records show that John A. Paulson, founder and chairman of the hedge fund Paulson & Co., gave $30,400 to the Democratic Senatorial Campaign Committee in June, qualifying him as a major Democratic donor.
Cramer sums it all up at the end of this video.
http://www.youtube.com/watch?v=Akp9fDpt-hY
good grief -how many times are we going to chew that one? enough already!
Yeah. It’s boring.
Buying a bond isn’t the same as buying a stock. A bond is rated. Why are they not going after the ratings agencies is my question? And, if a car dealer sells you a car that he knows is likely to explode when you drive off the lot, the buyer has recourse, even if the buyer is a sophisticated car guy, even is he’s a top mechanic in fact. This isn’t as simple as buying a stock that someone else is shorting. Totally agree with you however on the scapegoating business. Puh-leeze.
Po pimp
I agree 100%.
What everyone fails to miss is main st loves to hate authority and Wall st. Therefore uncle sam plays knight in shining armor to build their reputation up while taking pseudo action against the strongest most liquid I.B.
Like Skogie1 says why are they not going after ratings agencies? Simple: the fact that they got paid more money to give a more favorable ratings implies conspiracy to commit fraud. They can not cling too “we did not understand the security or SIV structure”
Furthermore the internal and external auditors, CFOs, lawyers, and watchdog agencies ignored calls by respected individuals and the FBI numerous amounts of times from 2003 – 2007 that rampant fraud was occurring in the mortgage lending market.
AGAIN THIS IS ALL ABOUT MISDIRECTION TO AVOID RICO AND CONSPIRACY CHARGES DURING WHAT IS STILL A FRAGILE BANKING SYSTEM.
Perhaps many years from now they might explore conspiracy to commit fraud on a grand scale…..but not now folks.
The People Have Spoke……Goldman Can Get In The Funnel. Score one for the B.Blazers.
Fly when we go to the barter system what will you be trading?
Give me some of dat GM IPO….. N Yhawk muni’s AAA+++ overweight
good read: http://www.rollingstone.com/politics/story/32906678/looting_main_street/print
The Ferengi Empire strikes again.
where is our friend ghetto fab now?
Its all a scam and shell game.
we need Ron Paul for prez yo.
regards
chuck
Watching from side
How the fuck do you deduce i treat my business the same as these guys from my post? I am telling you how it is, which incidentally, is the primary reason why i would rather have my eyes gorged out than have my kids enter the industry.
Do not assume to know anything. I can tell by your smug demeanor, you are a very, very frustrated man. Go take a nightime gig at the supermarket to meet your mortgage payments and leave me the fuck alone.
I for one think it was pretty brilliant to create CDOs in the first place… what a way to mitigation risk … the problem was a whole ton of loans were fraudulent… the original paper work was fraudulent in the first place. Looking at it on paper the guy has an A+ credit with 150k a year income,, in reality he only made 60k a year, mortgage company scumbags plus the banks not making them do their due diligence set this house of cards up… so these paper loans were mixed in… the rating agency looked at it and said yeah looks good… end of story.
From what I read most of the folks in the business knew this was going on… so they bought insurance. Whats sad is we bailed them out.. would have let it burn down… would have been a tough few months but shit we would be much better off in the long run.
What needs to happen is these things need to be traded in an open market… then the real value would be established…
Gonzo –
If the government would have guaranteed payment for ALL default mortgages for 1 year the CDO market would have collapsed – a 30 billion guarantee vs a 1 trillion bailout (with the added benefit of minimal 401k/IRA losses.
Not enough liquidity for an exchange traded market, imho, but they are traded on a bid and ask basis between multiple parties on the insittutional sell and buy side.
Yes it goes with the territory that most advisors are crap and are in it to steal their client’s money at the end of the day, if they can get away with it, and many do. But two wrongs don’t somehow make a “right.” That’s bad thinking and demonstrates where you sit with your own clients. I hope they are paying attention.
That said, the other issue which bears mentioning since it’s so obvious, is that this news event is not designed to weed out the bad from the system. That is the superficial analysis by the status quo. Nothing to be proud of here.
This news event is designed to make the masses believe that the system is flawed at the highest levels and must therefore be replaced with a new system, a system that is inter-nationalized (worldwide nationalization) by the United Nations and the World Bank or IMF. Thus, putting the same people in charge of the old system, in charge of the new system, albeit with more power and control the second time around. Again, two wrongs don’t make a right.
It goes without mentioning that the G20 and UN have been talking about making a world treasury for months, and are already pushing world legislation for doing so. Don’t be an idiot or accomplice in this bullshit and pretend you don’t know what the fuck is going on, because you do. Fly ain’t that stupid.
I don’t know if I’d go to this level of paranoia, but I am in full agreement that this is a Kabuki Theater review to get Dodd’s lockdown of the financial system in place so the Gummint can control even more of the pie than they already do.
This is just more corporate fascism being served up — the ones who will benefit from this legislation are Goldman, Citi, Merrill, BAC — ie, “The Usual Suspects.”
They are pushing the sheep into the corrall using the sheeps’ own misdirected outrage.
__
Evidence of zero paranoia and more on the fact side…
from this morning at http://finance.yahoo.com/news/Rep-Frank-says-Goldman-case-rb-1376947984.html?x=0&sec=topStories&pos=main&asset=&ccode=
“Representative Barney Frank said on Monday that securities regulators’ fraud case against Goldman Sachs increases the chance that financial reform will pass.”
Don’t tell me that Reuters is paranoid…
http://www.reuters.com/article/idUSTRE63F01020100416
Because I’ve been seeing similar stories in the mainstream press for MONTHS now.
“In a joint statement at the end of their second summit, the so-called BRIC nations of Brazil, Russia, India and China called for swift reforms of the World Bank and the International Monetary Fund to give a greater say to developing nations.”
Two rabbits walk into a bar. Punchline
..Rabbits don’t walk.
Great post, Fly. Thanks.
http://www.youtube.com/watch?v=Hreceqzr98Q
now it’s Goldman , Merryl , Germany warning and considering action against GS ..
it’s only 17 April ..
looking to add FAZ on monday
Every aspect of the US is under attack. The first thing the US government needs to do is shoot down these fucking chemical spray drones. They are causing major problems.
@ Po Pimp
With the name choice I hope your already aware of this…….
http://www.youtube.com/watch?v=qzwfyPLZHb8
and this……
http://www.youtube.com/watch?v=VuOdosizz7Q
I knew there was a hip hop artist out there with the name, but that’s not where it comes from. Small forward on our state championship basketball team had this nickname back in the late 80’s. Always thought it was one of the most badass nicknames of all time. So I stole it for purposes of ibc.
The Po Pimp I knew in high school would beat the living hell out of this hip hop guy. High school Po Pimp was one bad mofo.
The English pirate Captain blathart on his ship looking for Spanish Galleons:
Crows nest:(shouting) ” Spanish ship ahoy”
Captain Blathart: “attack. Cabin boy bring me my red shirt”
Cabin boy: “But captain why do you need a red shirt we going into battle right now”
Captain Blathart: (Angry) “bring me my red shirt”
Cabin boy: “But, but, captain a red shirt we going into battle right now”
Captain Blathart: (shouting) “bring me my red shirt now!”
Cabin boy runs, brings back red shirt, captain Balthart captures the Spanish Galleon.
Captain Blathart: “Boy come here…do not I repeat, do not disobey me ever again, do you understand me?!”
Cabin boy: “But captain I am so sorry I could not understand as we go to battle why you would want a red shirt”
Captain Blathart: “because boy!, if I get shot I do not want my men to see me bleed”
Cabin boy: “oh I am so sorry I completly understand now captain”
Crows nest: (shouting)”10 spanish ships ahoy”
Captain Blathart: (shouting)””Bring me my brown pants”
that’s a good story
I couldnt be bothered to read this entire string of comments, given the fact that its Saturday night, I’m clearing profits at the rate of 10% per week now for several weeks in a row, and more importantly by rejection of this melt up on a short term basis was correct.
But with all that said, I agree with your perspective on this GS business Messier Le Fly. Fact is I dont see any culpability — buyer beware and what not.
That said, i hope it goes on a bit further and gives us a better buying opportunity. You and i both know, at this point, that the recover is on and its strong.
So will there be a flood of lawsuits against Goldman now that big brother has dropped charges on them????
Barclays banking analyst Roger Freeman comes right out and blasts the SEC effort as “a well-timed, and perhaps not coincidental, effort to sway some on-the-fence Republicans” to get tough on financial reform.
“Targeting GS, given the flurry of anti-Wall Street press that has centered around that firm, offers the publicity that the administration needs at this critical juncture,” Freeman says in a note to clients today.
He says Senate Finance Committee Chairman Chris Dodd has targeted a vote on the Senate bill for April 26, “and given the short span of time between now and the end of the month, we are not surprised to see the stepped up support for the bill.”
They’re going after the wrong Paulson imo.
I’d bet that 95% of America thinks we are talking about Hank.
ah, the Fly-Guy…
http://trendandvalue.blogspot.com/2008/09/hank-bank-at-awards-ceremony.html
Man, those were the days.
95% of America doesn’t know who Hank Paulson is.
Fly
Your response of GS lack of complicity doesn’t surprise me. You are a Wall street Insider. That is why I read your blog, trying to learn the real dope. Your response was reasoned and rational. Now let me tell you from a Ham n Egger stand point what is going on.
This kabuki theatre begins but is not sufficient to expiate the sins of the money changers. The Street has transferred most of middle class wealth and they are understandably pissed off at FRE, TARP, GMAC etc. Redemption requires someone’s head on a pike- likely Blankenfein’s. The Ferengi is more adept than most imagined. This small bone will help the Dems immeasurably in November.
The cynicism we all feel was never felt by our fathers and the guys who fought in WW!!. Gangsta Ball. A corrupt lobbying system, hollow now at the core.
Sell Deloitte Touche and ICF
Must respectfully disagree with statements that GS necessarily did nothing wrong.
If proven, the allegation that GS allowed the short party to select the portfolio and failed to disclose to the counterparty that their opposite number selected the assets could be found to be a material misrepresentation.
This is not a case of two independent third parties taking opposite sides of the trade. This situation has a middleman, GS, and there are laws governing the involvement of the middleman in the trade. This allegaton could have legs, especially after the Feds trawl through thousands of emails and depose half of GS in fact finding.
I look forward to the Fabbily Fab e-mails saying that Paulson is about to get cornholed.
They should come out after the vote on the Dodd Bill, I should expect.
__________
Like I said at the outset, this whole thing is choreographed. GS designates some lowly VP as a scapegoat, the dems get to stuff the repubs into teabags (yes, jake, teabags), bond yields drop giving treasury cheap money (is it an accident that GS has been bearish on equities, in contrast to morgan stanley and JPM, who are bullish?). GS has known about this for 9 months apparently. Curious to see what act 2 will be like. Somebody else that the gov doesn’t like? Also, did you hear that the Germans are getting into the act.
Spooks, you are unhealthily focused on the “homo sports.”
Is there something you want to get off your chest?
(or two things?)
___
The choreography started when WTC 7 free-falled into it’s own imprint, thus becoming the first reinforced steel building in world history to collapse due to fire. And to free fall at the same time — what are the odds? Not to mention that TV media covered the collapse 23 minutes before it actually happened.
Kabuki Theater to the max, baby.
I read the SEC document.
Jurors could understand this.
It was well written and an outline of an easy case to prove.
I suggest everybody read it (specially if you are going to have an opinion on it.)
The SEC always makes it simple for jurors, because they have the same IQ and level of understanding as jurors.
The last decile at St. John’s Law School is going to become hamburger v. Latham & Watkins (or whomever).
______
This ain’t a case of buyer beware and who cares about the counterparty. This is a case of buying shares when the guy shorting the other side follows through by assassinating the board members and burning down the factory. Paulson wasn’t “betting”. He rigged it. I already see one attorney general planning his career. The combined air forces of Europe would already be bombing Connecticut, if their airports weren’t all closed…
That must be why Paulson isn’t even named in the indictment.
“Understanding Fail.”
________
I have come to the conclusion that mankind are not generally capable of ethical behavior except when it is blatantly self serving–which is somewhat contradictory.
Wall Street will continue to be run by assholes and will continue to seek the support of all the greedy people that buy into their Ponzi scam. Unfortunately, as history has demonstrated, the status quo will continue until the system breaks down into an an archaic state–at which time people of principle and moral integrity will rebuild it only to be corrupted again by the passions of unenlightened men.