Listen to the voice of wisdom and reason in a wilderness of partisan rhetoric -- No political insanity, no conservative hypocrisy, no liberal foolishness -- Just straight talk, straight at you, and that’s no bull!!
Fabulous Fab is Fabrice Tourre, a Goldman Sachs trader involved in a deal that has prompted civil fraud charges from the Securities and Exchange Commission. In a January 29, 2007, email to a woman he was dating, Fabulous Fab described a Goldman Sachs financial product as follows:
"When I think that I had some input into the creation of this product - which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: 'Well, what if we created a "thing," which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?' - it sickens the heart to see it shot down in mid-flight.... It's a little like Frankenstein turning against his own inventor."
UPDATE IV: "The biggest bummer to arise from the allegations that the revered and feared Wall Street puppet master Goldman Sachs had played us all for patsies is this: the dial on the Wall Street capital-formation machine, the engine that was supposed to be the driving force of the greatest economic system on earth, was purposely set to junk — worthless, synthetic junk. " Read Time, The Case Against Goldman Sachs.
UPDATE III: For more proof that Wall Street just used Main Street mortgages to gamble the economy into ruin, read The New York Times, Questions for Banks That Put Together Deals, which states:
"The C.D.O. business has been a vital engine in the money machine at many firms for much of the last decade.
Big investors became addicted to the extra yield. Rating agencies earned windfall profits from evaluating the securities. Investment banks enjoyed hefty fees from ready buyers of the assets. And C.D.O. dealmakers racked up huge bonuses, regardless of whether their products later imploded.
If the limitless appetite for these so-called structured products provided much of the easy money that fueled the housing boom, it also contributed to its bust. What began as a financial innovation lauding the benefits of diversified portfolios of corporate investments morphed into one giant bet on the American housing market.
To lure investors who wanted higher returns, bankers increasingly stuffed C.D.O.’s with riskier assets like subprime mortgage securities, rather than traditional corporate bonds.
They bought their own mortgage companies to feed their loan packaging machines and relaxed the standards on the types of assets they would accept."
It appears that Goldman and other investment institutions (not banks in the traditional sense) may have structured and sold the guarantee or insurance on the underlying asset without disclosure of losses, accounting irregularities and possible conflicts of interest on the underlying assets. Goldman then got a little of the action with a side bet against the asset(by purchasing the synthetic C.D.O.’s/swaps).
Which is why I suggested that the economic recovery plan should have included legislation that invalidated the swaps.
After some quiet, the Republi-con party faithful are out spreading myths and engaging in Republi-conrevisionist history (such as Comrade Mark, longtime Republi-con party loyalist, on Friday's show) . It wasn't Carter and the Community Reinvestment Act that nearly destroyed the economy, it was Republi-con deregulation and opposition to government oversight. Read the details in these previous posts:
The Vanity Fair article is an excerpt from The Big Short: Inside the Doomsday Machine, a book which profiles people who shorted the real-estate bubble. One of these individuals was Michael Burry, who realized "in May 2003 that the real-estate bubble was being driven ever higher by the irrational behavior of mortgage lenders who were extending easy credit." Since he couldn't short the mortgages in the traditional fashion without substantial downside exposure, Burry convinced Goldman Sachs to create credit-default swaps on the subprime-mortgage bonds, so that the "downside was defined and certain, and the upside was many multiples of it." "As early as 2004, if you looked at the numbers, you could clearly see the decline in lending standards. In Burry’s view, standards had not just fallen but hit bottom. The bottom even had a name: the interest-only negative-amortizing adjustable-rate subprime mortgage." The book describes the sheer ignorance of the mavens of Wall Street:
"The price of insurance was driven not by any independent analysis but by the ratings placed on the bond by Moody’s and Standard & Poor’s. If he wanted to buy insurance on the supposedly riskless triple-A-rated tranche, he might pay 20 basis points (0.20 percent); on the riskier, A-rated tranches, he might pay 50 basis points (0.50 percent); and on the even less safe, triple-B-rated tranches, 200 basis points—that is, 2 percent. (A basis point is one-hundredth of one percentage point.) The triple-B-rated tranches—the ones that would be worth zero if the underlying mortgage pool experienced a loss of just 7 percent—were what he was after. He felt this to be a very conservative bet, which he was able, through analysis, to turn into even more of a sure thing. Anyone who even glanced at the prospectuses could see that there were many critical differences between one triple-B bond and the next—the percentage of interest-only loans contained in their underlying pool of mortgages, for example. He set out to cherry-pick the absolute worst ones and was a bit worried that the investment banks would catch on to just how much he knew about specific mortgage bonds, and adjust their prices.
Once again they shocked and delighted him: Goldman Sachs e-mailed him a great long list of crappy mortgage bonds to choose from. “This was shocking to me, actually,” he says. “They were all priced according to the lowest rating from one of the big-three ratings agencies.” He could pick from the list without alerting them to the depth of his knowledge. It was as if you could buy flood insurance on the house in the valley for the same price as flood insurance on the house on the mountaintop.
The market made no sense, but that didn’t stop other Wall Street firms from jumping into it, in part because Mike Burry was pestering them. For weeks he hounded Bank of America until they agreed to sell him $5 million in credit-default swaps. Twenty minutes after they sent their e-mail confirming the trade, they received another back from Burry: “So can we do another?” In a few weeks Mike Burry bought several hundred million dollars in credit-default swaps from half a dozen banks, in chunks of $5 million. None of the sellers appeared to care very much which bonds they were insuring. He found one mortgage pool that was 100 percent floating-rate negative-amortizing mortgages—where the borrowers could choose the option of not paying any interest at all and simply accumulate a bigger and bigger debt until, presumably, they defaulted on it. Goldman Sachs not only sold him insurance on the pool but sent him a little note congratulating him on being the first person, on Wall Street or off, ever to buy insurance on that particular item. “I’m educating the experts here,” Burry crowed in an e-mail."
UPDATE VIII: Compare the Steen case and video (below), to the case of a bycyclist pushed to the ground by a New York City police office, for seemingly no reason. That officer was prosecuted and convicted of lying to cover-up the incident. Read The New York Times, Ex-Officer Guilty in Shove of Bicyclist. Here is the video of that incident:
UPDATE VII: An internal review of the actions of the officer that caused the death of 17-year-old Victor Steen stated:
UPDATE VII: Seems that the police officer's actions were a violation of the Pensacola Police Department policy. As a result of Steen's death, the officer was suspended for 80 hours without pay. Read Rick's Blog, Official PPD statement on Officer Ard.
Was the policy violation discussed during the corner's inquest, or mentioned in the ruling?
UPDATE VI: The verdict of the Coroner’s inquest is in. His death the result of over zealous enforcement of a statute making it a non-criminal traffic offense to ride a bike at night without a light. Read it and decide for yourself whether the outcome was justified:
People even protested at his first appearance in court on Wednesday.
UPDATE III: For more on the Steen case, read the Independent News, The Pursuit Of Justice.
So what was the purpose of a coroner’s inquest. It is "a political shield."
"[S]ince 1988 at least 12 coroner’s inquests have been conducted in Escambia County in cases involving the Florida Department of Law Enforcement. Two of those 12 cases resulted in a finding that officers contributed to the victim’s death. However, the state attorney did not initiate a prosecution in either case."
UPDATE II: Today's inquest testimony is the the officer didn't have time to stop. So does that mean that it is not his fault, or that he was following too closely? Read the Pensacola News Journal, Investigator: Ard could not have stopped.
If you hit the car ahead of you, would the excuse "I didn't have time to stop" exonerate you?
How does a gun get into a pocket without getting fingerprints on it?
After Hurricane Katrina, near tha Danziger Bridge in eastern New Orleans, five people were "walking to get food and supplies, and . . . two [others] were on their way to a family member’s dentistry office when they were fired upon by police officers. Four were seriously injured." Two were killed. It was immediately apparent that the shooting was unjustified. Moments later a police Lieutenant arrived at the scene and "he and the other officers began to plot a cover-up, planting a gun near the site to make the shootings appear justified."
I hope there has been further investigation of the 'clean' gun issue.
One dead black kid after the police use deadly force without justification. Watch the video:
Running from the police is not justification for using deadly force. And the officer used deadly force twice. The second use was hitting the kid with the vehicle, which was likely unintentional. But the first use was firing the taser at a person riding a bicycle.
Although there is no reason to believe that the officer intended to kill the kid, it seems that the risk of serious injury or death is likely where the police use a taser on someone riding a bicycle. And it appears that nothing the office knew during the chase justified the use of deadly force.
Would you like to listen to the voice of wisdom and reason in a wilderness of partisan rhetoric -- no political insanity, no conservative hypocrisy, no liberal foolishness -- just straight talk, straight at you, and without the bull, 5 days a week?
If so I have over five years experience doing a weekly show and I'd like more air time, two hours a week is too little when there are so many problems and so much Republi-con and Naive-ocrat ignorance. If you know of a radio station that needs a host, post a reply.
This blog is my application, for a reference call 1330 AM WEBY and ask for Mike.
But don't bother unless the radio station listeners want a lively discussion and debate of the issues, and can handle the truth.
Cause I'm a gosh darn, fersure, you betcha maverick.
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