This piece is an invitation for anyone else to document, contribute or just write about their own personal experiences as to how the financial crisis has interrupted, disrupted their lives, others, and or business or any other pursuits.
So - Shhhhh…I’m trying to play capitalism, has had huge effect on me. Every day it seems there is new information. Mind you not just incremental daily creep of news BUT often seismic news. Just this past week the NY AG, who had initiated investigation into any and all mortgage banking practices, was named to head a new federal investigation. So, although I didn't have to, I begin to read, research into what happened to cause this, why, who was involved and what other agendas may be at play in contrast to a plain old vanilla investigation the Empire State AG has enough wits to launch LAST year.
How long did that interruption take me to do? Probably an hour or more; it's not just the elapse of time; it's the interruption and sapping of the precious daily amount of creative energy I have away from other pursuits.
See my point is, with all the interruptions of news, (and I'm not even counting the social media disruptions) NORMAL capitalism, defined perhaps with an extra spoonful of nostalgia, free markets don't happen. News and information drive markets. Free markets, at least those we deserve, are for example, like the familiar parties of guys and girls, girls compete with each other and guys compete with each other to get their choice preference in rank order and guys we know there ain't no...at closing time; by the way the girls already know that we know this and are LONG gone before it even comes close to that point.
However, getting back to the party for capitalism, there is a new, brutish and uninvited guest - the Fed. In addition he's a financial drug dealer, having arrived dressed not in a toga, but a white doctors coat and has a matching beard.
The capitalism party, has always been played by the same open, understood and agreed upon in advance rules of Darwinian competition and winners and losers; only to be played at the next week's party. Except, for the past few years the brute has shown up and in fact held press conferences so as to tell us one more time that he's a student of TGD (right - we heard it the very first time) after the party so as to improve his image.
Pretty soon, those who had been attending the Party for Capitalism decided to stay home, not even go out, well...it just wasn't fun for anymore; because they've been hearing there's now even more weird people showing up at the party with the financial drugs.
Friday, January 27, 2012
Wednesday, January 18, 2012
Volcker Rule, Proprietary Trading and...
concerns expressed by some, mostly those whose bonuses, options and or compensation depend(ed) on it or their political sock puppets, over the free flow of capital.
Let's be clear - proprietary trading is a misnomer. How's that?
In the past, trading did NOT take place, HOLDING did and valuing prop positions with home grown computer models for proprietary profit. In fact, at the end of 2007, summing up such holdings came to a breezy $16T; correct $16T of assets owned (NOT traded, perhaps never) but NOT paid for. Hiding of marks seem to have taken place too - when certain people take the time to READ a 518 pp FCIC document.
Since the sponsors of proprietary trading have been called out for what they are, the next rallying point "free FLOW of capital" also fails.
The 2007/8 financial crisis is THE case study that prop trading INHIBITED, indeed was the polar opposite of the free flow of capital. How or why else would the Fed, lender of last resort, have to take action, under extreme, exigent circumstances and step up and rescue, with $1.2T in CASH in exchange for certain prop trading securities, if assuming arguendo prop trading had any positive effect on the free flow of capital? I'm not even going to list the trillions of dollars of amelioration (attempts) on behalf of the erstwhile prop trader aficionados - please spare me.
The champions of prop trading, do not even have support in the "end justifies the means" and are EVEN MORE preposterous, disgusting, revolting, and abhorrent as saying (with apologies in advance, if I offend any victims) "A few guys, got drunk and just gang raped your sister but it's ok, because society benefits from an increasing birth rate, and a growing, younger population, not worrying about the fact that the victim contracted AIDS as a result of the brutal attack."
YES - that's it - certain prop trading units on Wall St gave Main St and the rest of the US and world real economies AIDS from private, exclusive financial sex orgies going on ALL NIGHT LONG.
If, the bonus cry babies, false flag waving, money sucking vampires and their considerable, ill-informed, lobbying corp d'esprit inside the beltway WANT to fix the problem then all that's required is a few simple, doable things:
Disclose EVERY trade on an independent exchange or platform
Clear EVERY trade on an independent clearing agent
Every trade would include any security including any and all private placements of any stripe or regulation, future, option, currency, derivative, credit default swap contract, or any other new financial interest or contract on (or derivative of) any of the above
Hedge funds, need to disclose, just like their 1940 Act competitors, holdings (long, short, repo, swap, etc.) twice per annum.
On that basis, let the largest, most sophisticated financial institutions TRADE (that's an action verb) all they want as long as it's arms-length and market - based; THEN AND ONLY THEN THE MARKET WILL SEE CAPITAL TRULY and EFFICIENTLY FLOW.
The SEC terminated the CSE (Consolidated Supervised Entity program) on September 26, 2008 for a reason - EVERY SINGLE CSE FAILED, MERGED OR CEASED OR APPLIED TO BECOME LUCKY DISCOUNT WINDOW BORROWERS AS BHC'S ON SEPTEMBER 21, 2008- including:
Bear Stearns,
Lehman Bros.,
Goldman Sachs,
Merrill Lynch,
Morgan Stanley.
Period, full stop.
Let's be clear - proprietary trading is a misnomer. How's that?
In the past, trading did NOT take place, HOLDING did and valuing prop positions with home grown computer models for proprietary profit. In fact, at the end of 2007, summing up such holdings came to a breezy $16T; correct $16T of assets owned (NOT traded, perhaps never) but NOT paid for. Hiding of marks seem to have taken place too - when certain people take the time to READ a 518 pp FCIC document.
Since the sponsors of proprietary trading have been called out for what they are, the next rallying point "free FLOW of capital" also fails.
The 2007/8 financial crisis is THE case study that prop trading INHIBITED, indeed was the polar opposite of the free flow of capital. How or why else would the Fed, lender of last resort, have to take action, under extreme, exigent circumstances and step up and rescue, with $1.2T in CASH in exchange for certain prop trading securities, if assuming arguendo prop trading had any positive effect on the free flow of capital? I'm not even going to list the trillions of dollars of amelioration (attempts) on behalf of the erstwhile prop trader aficionados - please spare me.
The champions of prop trading, do not even have support in the "end justifies the means" and are EVEN MORE preposterous, disgusting, revolting, and abhorrent as saying (with apologies in advance, if I offend any victims) "A few guys, got drunk and just gang raped your sister but it's ok, because society benefits from an increasing birth rate, and a growing, younger population, not worrying about the fact that the victim contracted AIDS as a result of the brutal attack."
YES - that's it - certain prop trading units on Wall St gave Main St and the rest of the US and world real economies AIDS from private, exclusive financial sex orgies going on ALL NIGHT LONG.
If, the bonus cry babies, false flag waving, money sucking vampires and their considerable, ill-informed, lobbying corp d'esprit inside the beltway WANT to fix the problem then all that's required is a few simple, doable things:
Disclose EVERY trade on an independent exchange or platform
Clear EVERY trade on an independent clearing agent
Every trade would include any security including any and all private placements of any stripe or regulation, future, option, currency, derivative, credit default swap contract, or any other new financial interest or contract on (or derivative of) any of the above
Hedge funds, need to disclose, just like their 1940 Act competitors, holdings (long, short, repo, swap, etc.) twice per annum.
On that basis, let the largest, most sophisticated financial institutions TRADE (that's an action verb) all they want as long as it's arms-length and market - based; THEN AND ONLY THEN THE MARKET WILL SEE CAPITAL TRULY and EFFICIENTLY FLOW.
The SEC terminated the CSE (Consolidated Supervised Entity program) on September 26, 2008 for a reason - EVERY SINGLE CSE FAILED, MERGED OR CEASED OR APPLIED TO BECOME LUCKY DISCOUNT WINDOW BORROWERS AS BHC'S ON SEPTEMBER 21, 2008- including:
Bear Stearns,
Lehman Bros.,
Goldman Sachs,
Merrill Lynch,
Morgan Stanley.
Period, full stop.
Monday, January 16, 2012
NYT's Davidson's - What Wall St. does for us. How about if I let you see my hole, you let me strip you naked!
To quote Mr Davidson's assumption stated in the opening paragraph:
"The country’s largest investment banks, commercial banks and a few big insurance companies (what we generally refer to as Wall Street) play the crucial role of intermediation — matching borrowers with lenders."
LET ME JUST CUT TO THE CHASE:
Mr Davidson's reason for the reporting is defensive, masked as cheerleading, due to legitimate questions about the social utility of Wall St. However, right out of the starting gate he stumbles because his premise is INCORRECT.
As concerns the recent financial crisis in particular, Mr Davidson must not be aware of the $16T hole as at end of 2007, correct $16T. The existence of the hole is by definition, NOT intermediation. The Fed and or the US Treasury exchanged $1.2T cold hard, tinkling CASH for "model-valued-securities-NOT-MARKET-valued-securities" that, in part, made up the hole. Said another way, if they were truly and prudently intermediating they wouldn't own truly staggering, eye-popping sums FOR their own profit; these financial giants were not in the moving business, they were in the STORAGE business...BIG TIME! Even Mr Bernanke was rather astonishingly, unawares, and admonished, what could arguably be called a savvy audience, of the familiar textbook intermediation in an October 2007 (not a typo - 2007) speech to the NY Economic Club, see his fifth paragraph excerpt:
At one time, most mortgages were originated by depository institutions and held on their balance sheets. Today, however, mortgages are often bundled together into mortgage-backed securities or structured credit products, rated by credit rating agencies, and then sold to investors.
See the related "One Year, One Trillion Dollars; the education of Ben Bernanke from 2007 to 2008"
Mr. Davidson is correct in narrow sense, as the Hole was created BY the country’s largest investment banks, commercial banks. If Davidson understood compensation on Wall St and the $16T hole - he would recognize them for what they were; the indispensable cause, the BONUS BASE for incredible bonuses bestowed only upon a select few. Further, I might add, there seems little doubt that the overwhelming majority of workers, indeed fellow shareholders at these firms were defrauded by the secrets kept by the prop trading desks, in too many cases, sucking the entire life savings out of the pockets, including 401k accounts or company stock investment accounts all the way down to those toiling in the secretarial, janitorial, maintenance or livery pools; defrauded by the hiding and sheer magnitude of the $16T hole; what did they know about any $16T hole?
Here's what the FDIC had to say about the "Hole":
In May 2011, former Chair, Sheila Bair said:
We also learned in the crisis that leverage can be masked through off-balance-sheet positions, implicit guarantees, securitization structures, and derivatives positions. The crisis showed that the problem with leverage is really larger than the bank balance sheet itself. Excessive leverage is a general condition of our financial system that is subsidized by the tax code and lobbied for by financial institutions and borrower constituencies alike, to their short-term benefit and to the long-term cost of our economy.
In March 2011, FDIC TLGP director Jason Cave said:
Overall, the balance sheets at our largest financial firms have improved since the crisis. Firms have deleveraged since the crisis, as measured by stronger leverage and risk-based capital ratios. Further, many of the complex structures that concealed additional leverage and exposure, such as structured investment vehicles and other off-balance-sheet conduits have been largely consigned to the history books. Cash and liquid securities represent larger percentages of the balance sheet, while reliance on short term debt has declined. These are all positive trends from the FDIC's perspective as deposit insurer and guarantor of TLGP debt.
What institutions contributed to the $16T hole you may ask?
The following should help to illuminate:
How TBTF Banks (BHC's and former Investment Banks aka CSE's) dug themselves a Capital Hole trillions of dollars deep, filled it with Derivatives priced on Home court, then blew it out to create the Foreclosure and then Financial Crisis, however before 2008, EVERY mortgage borrower, many others including Fannie and Freddie, and Auction Rate Securities Investors were defrauded
Bank or CSE | Capital Hole 2007 | % of Balance Sheet NOT paid for
Bear Stearns $ (398,957,000,000) 97.4%
Lehman $ (885,427,000,000) 98.1%
Citigroup $(4,217,486,000,000) 98.5%
Goldman Sachs $(1,238,036,000,000) 97.3%
JP Morgan $(3,221,600,000,000) 97.7%
BankofAmerica $(3,180,155,000,000) 98.2%
Morgan Stanley $(1,128,917,000,000) 97.7%
Wachovia $ (894,109,900,000) 96.4%
Washington Mutual $ (433,404,000,000) 96.1%
Wells Fargo $ (785,486,000,000) 95.9%
TOTAL CSE ONLY
(includes Bear Stearns, Lehman Bros., Goldman Sachs, BofA (Merrill Lynch), Morgan Stanley)
$ (6,831,492,000,000) 97.9%
TOTAL BANKS ONLY
(Citigroup (Smith Barney), JP Morgan, Wamu, Wells Fargo, Wachovia)
$(9,552,085,900,000) 97.7%
TOTAL ALL CSEs & BANKS
$(15,950,173,900,000) 97.8%
Total Assets and Off Balance Sheet Contingent Funding Commitments are included as any and all on, off balance sheet conduits i.e. SIVs and or off shore entities; as during 2008/9 many of these items were brought back ON balance sheet
Source: FCIC, Mr Kyle Bass prepared testimony January 13, 2010; page 13
Link: http://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2010-0113-Bass.pdf
Copyright © Chris McConnell & Associates 2012 All rights reserved
www.fiduciaryexpert.com
2004 - Another SEC financial "innovation" - was Mr Davidson aware?
We can look to a program that few have ever heard of – but make no mistake – absent this SEC creation; yes another SEC innovation, we would NOT have had 1) the housing price bubble, 2) the housing overbuilding bubble, 3) faux (cash out mortgage equity refi's) economic growth from 2004 – 2007, 4) the financial crisis, 5) millions of unemployed, 6) millions of bankruptcy filings by fellow Americans, 7) millions of foreclosures, homeless families and children, 8) millions of vacant homes and 9) millions more foreclosures to come and more...
See the SEC created a 400 page briefing book and during a 55 minute meeting (condensed to a excellent 4 minute video from the NYT's Stephen Labaton's October 2008 article) impressed the 5 commissioners who sit atop the SEC in 2004 to approve “ONLY the largest, MOST sophisticated investment banks” including Bear Stearns, Goldman Sachs, Lehman Bros., Merrill Lynch and Morgan Stanley to 1) use, 2) IF they so chose, 3) voluntarily, 4) a new way to calculate their capital cushions; that new way was based on 5) their own computer models, not markets; yes you read correctly – MODELS, not markets.
However, back in 1998 one of the CSE’s had this to say about models; which they totally forgot in the 2000’s: Merrill Lynch’s 1998 annual report, as captured in Roger Lowenstein's "When Genius Failed" LTCM tome, page 235:
"Merrill Lynch uses mathematical risk models to help estimate its exposure to market risk" "may provide a greater sense of security than warranted; therefore, reliance on these models should be limited".
However, it appears that when it came time to lobby the SEC to create the CSE program "only for the largest and most sophisticated broker dealers" the 1998 annual report writers and or signatories had had a technologic transformation only to be undone in a mere four years; as SEC Chairman Cox ended the infamous CSE program on September 26, 2008.
Oh, by the way, CSE stands for the erstwhile Consolidated Supervised Entity program –when nothing of the sort seems to have occurred. The SEC did NOT even approve (or subject to proof) much less review and or understand the models each firm 1) created and 2) chose to use 3) voluntarily – in advance as promised by the staff of the SEC in the 55 minute meeting in April 2004 nor I believe the letter of the regulation. All, yes all five CSE’s have disappeared as they either merged into BHCs’, declared BK as with Lehman Bros, or applied to become BHCs as happened with Goldman Sachs and Morgan Stanley.
Getting back to the $16T hole the banks found themselves in was so large because – do you want to guess?
Yes, it was so large because – right – I’m sure you’ve figured it out by now, because – their BONUS checks swelled as the hole got larger!
Now, that hole is being filled up to cover up the largest financial swindle and theft of wealth in the collective history of the world. It’s being filled up with foreclosures, and bankruptcies, the Fed is helping out too with near, five years now, of free money, and its previous purchases (evidencing the ABSENCE of that oh, so fervently hoped for "intermediation" formerly known as "safety and soundness") of MBS from those banks over $1.2T and other kinder, gentler welfare courtesy of the UST, SEC and FASB.
Why do I say financial swindle and theft of wealth?
There’s several reasons:
1. Banks are AND were regulated depository institutions, and are REQUIRED to operate under “safety and soundness" applicable even, to most of the former CSE's;
2. Financial institutions’ concentrated pricing and market power created HUGE information advantages and exploitation;
3. Financial institutions in the US alone, spend over half a billion dollars a day on IT;
4. Financial executives KNOW the historical returns from the major asset classes like the back of their hand;
5. Financial executives KNOW regression to the mean behavior of MARKETS;
6. Certain financial executives KNEW that MODELS, not markets created that $16T hole;
7. Those executives owe a better explanation as to how exactly their bonus payments and everyone under them was calculated from 2004 to 2008.
So now that I let you see my hole, you let me strip you naked; from your brain down to your toes and along the way I rip out your soul.
"The country’s largest investment banks, commercial banks and a few big insurance companies (what we generally refer to as Wall Street) play the crucial role of intermediation — matching borrowers with lenders."
LET ME JUST CUT TO THE CHASE:
Mr Davidson's reason for the reporting is defensive, masked as cheerleading, due to legitimate questions about the social utility of Wall St. However, right out of the starting gate he stumbles because his premise is INCORRECT.
As concerns the recent financial crisis in particular, Mr Davidson must not be aware of the $16T hole as at end of 2007, correct $16T. The existence of the hole is by definition, NOT intermediation. The Fed and or the US Treasury exchanged $1.2T cold hard, tinkling CASH for "model-valued-securities-NOT-MARKET-valued-securities" that, in part, made up the hole. Said another way, if they were truly and prudently intermediating they wouldn't own truly staggering, eye-popping sums FOR their own profit; these financial giants were not in the moving business, they were in the STORAGE business...BIG TIME! Even Mr Bernanke was rather astonishingly, unawares, and admonished, what could arguably be called a savvy audience, of the familiar textbook intermediation in an October 2007 (not a typo - 2007) speech to the NY Economic Club, see his fifth paragraph excerpt:
At one time, most mortgages were originated by depository institutions and held on their balance sheets. Today, however, mortgages are often bundled together into mortgage-backed securities or structured credit products, rated by credit rating agencies, and then sold to investors.
See the related "One Year, One Trillion Dollars; the education of Ben Bernanke from 2007 to 2008"
Mr. Davidson is correct in narrow sense, as the Hole was created BY the country’s largest investment banks, commercial banks. If Davidson understood compensation on Wall St and the $16T hole - he would recognize them for what they were; the indispensable cause, the BONUS BASE for incredible bonuses bestowed only upon a select few. Further, I might add, there seems little doubt that the overwhelming majority of workers, indeed fellow shareholders at these firms were defrauded by the secrets kept by the prop trading desks, in too many cases, sucking the entire life savings out of the pockets, including 401k accounts or company stock investment accounts all the way down to those toiling in the secretarial, janitorial, maintenance or livery pools; defrauded by the hiding and sheer magnitude of the $16T hole; what did they know about any $16T hole?
Here's what the FDIC had to say about the "Hole":
In May 2011, former Chair, Sheila Bair said:
We also learned in the crisis that leverage can be masked through off-balance-sheet positions, implicit guarantees, securitization structures, and derivatives positions. The crisis showed that the problem with leverage is really larger than the bank balance sheet itself. Excessive leverage is a general condition of our financial system that is subsidized by the tax code and lobbied for by financial institutions and borrower constituencies alike, to their short-term benefit and to the long-term cost of our economy.
In March 2011, FDIC TLGP director Jason Cave said:
Overall, the balance sheets at our largest financial firms have improved since the crisis. Firms have deleveraged since the crisis, as measured by stronger leverage and risk-based capital ratios. Further, many of the complex structures that concealed additional leverage and exposure, such as structured investment vehicles and other off-balance-sheet conduits have been largely consigned to the history books. Cash and liquid securities represent larger percentages of the balance sheet, while reliance on short term debt has declined. These are all positive trends from the FDIC's perspective as deposit insurer and guarantor of TLGP debt.
What institutions contributed to the $16T hole you may ask?
The following should help to illuminate:
How TBTF Banks (BHC's and former Investment Banks aka CSE's) dug themselves a Capital Hole trillions of dollars deep, filled it with Derivatives priced on Home court, then blew it out to create the Foreclosure and then Financial Crisis, however before 2008, EVERY mortgage borrower, many others including Fannie and Freddie, and Auction Rate Securities Investors were defrauded
Bank or CSE | Capital Hole 2007 | % of Balance Sheet NOT paid for
Bear Stearns $ (398,957,000,000) 97.4%
Lehman $ (885,427,000,000) 98.1%
Citigroup $(4,217,486,000,000) 98.5%
Goldman Sachs $(1,238,036,000,000) 97.3%
JP Morgan $(3,221,600,000,000) 97.7%
BankofAmerica $(3,180,155,000,000) 98.2%
Morgan Stanley $(1,128,917,000,000) 97.7%
Wachovia $ (894,109,900,000) 96.4%
Washington Mutual $ (433,404,000,000) 96.1%
Wells Fargo $ (785,486,000,000) 95.9%
TOTAL CSE ONLY
(includes Bear Stearns, Lehman Bros., Goldman Sachs, BofA (Merrill Lynch), Morgan Stanley)
$ (6,831,492,000,000) 97.9%
TOTAL BANKS ONLY
(Citigroup (Smith Barney), JP Morgan, Wamu, Wells Fargo, Wachovia)
$(9,552,085,900,000) 97.7%
TOTAL ALL CSEs & BANKS
$(15,950,173,900,000) 97.8%
Total Assets and Off Balance Sheet Contingent Funding Commitments are included as any and all on, off balance sheet conduits i.e. SIVs and or off shore entities; as during 2008/9 many of these items were brought back ON balance sheet
Source: FCIC, Mr Kyle Bass prepared testimony January 13, 2010; page 13
Link: http://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2010-0113-Bass.pdf
Copyright © Chris McConnell & Associates 2012 All rights reserved
www.fiduciaryexpert.com
2004 - Another SEC financial "innovation" - was Mr Davidson aware?
We can look to a program that few have ever heard of – but make no mistake – absent this SEC creation; yes another SEC innovation, we would NOT have had 1) the housing price bubble, 2) the housing overbuilding bubble, 3) faux (cash out mortgage equity refi's) economic growth from 2004 – 2007, 4) the financial crisis, 5) millions of unemployed, 6) millions of bankruptcy filings by fellow Americans, 7) millions of foreclosures, homeless families and children, 8) millions of vacant homes and 9) millions more foreclosures to come and more...
See the SEC created a 400 page briefing book and during a 55 minute meeting (condensed to a excellent 4 minute video from the NYT's Stephen Labaton's October 2008 article) impressed the 5 commissioners who sit atop the SEC in 2004 to approve “ONLY the largest, MOST sophisticated investment banks” including Bear Stearns, Goldman Sachs, Lehman Bros., Merrill Lynch and Morgan Stanley to 1) use, 2) IF they so chose, 3) voluntarily, 4) a new way to calculate their capital cushions; that new way was based on 5) their own computer models, not markets; yes you read correctly – MODELS, not markets.
However, back in 1998 one of the CSE’s had this to say about models; which they totally forgot in the 2000’s: Merrill Lynch’s 1998 annual report, as captured in Roger Lowenstein's "When Genius Failed" LTCM tome, page 235:
"Merrill Lynch uses mathematical risk models to help estimate its exposure to market risk" "may provide a greater sense of security than warranted; therefore, reliance on these models should be limited".
However, it appears that when it came time to lobby the SEC to create the CSE program "only for the largest and most sophisticated broker dealers" the 1998 annual report writers and or signatories had had a technologic transformation only to be undone in a mere four years; as SEC Chairman Cox ended the infamous CSE program on September 26, 2008.
Oh, by the way, CSE stands for the erstwhile Consolidated Supervised Entity program –when nothing of the sort seems to have occurred. The SEC did NOT even approve (or subject to proof) much less review and or understand the models each firm 1) created and 2) chose to use 3) voluntarily – in advance as promised by the staff of the SEC in the 55 minute meeting in April 2004 nor I believe the letter of the regulation. All, yes all five CSE’s have disappeared as they either merged into BHCs’, declared BK as with Lehman Bros, or applied to become BHCs as happened with Goldman Sachs and Morgan Stanley.
Getting back to the $16T hole the banks found themselves in was so large because – do you want to guess?
Yes, it was so large because – right – I’m sure you’ve figured it out by now, because – their BONUS checks swelled as the hole got larger!
Now, that hole is being filled up to cover up the largest financial swindle and theft of wealth in the collective history of the world. It’s being filled up with foreclosures, and bankruptcies, the Fed is helping out too with near, five years now, of free money, and its previous purchases (evidencing the ABSENCE of that oh, so fervently hoped for "intermediation" formerly known as "safety and soundness") of MBS from those banks over $1.2T and other kinder, gentler welfare courtesy of the UST, SEC and FASB.
Why do I say financial swindle and theft of wealth?
There’s several reasons:
1. Banks are AND were regulated depository institutions, and are REQUIRED to operate under “safety and soundness" applicable even, to most of the former CSE's;
2. Financial institutions’ concentrated pricing and market power created HUGE information advantages and exploitation;
3. Financial institutions in the US alone, spend over half a billion dollars a day on IT;
4. Financial executives KNOW the historical returns from the major asset classes like the back of their hand;
5. Financial executives KNOW regression to the mean behavior of MARKETS;
6. Certain financial executives KNEW that MODELS, not markets created that $16T hole;
7. Those executives owe a better explanation as to how exactly their bonus payments and everyone under them was calculated from 2004 to 2008.
So now that I let you see my hole, you let me strip you naked; from your brain down to your toes and along the way I rip out your soul.
Sunday, January 1, 2012
Let’s talk about sex baby! just kidding; let’s just talk about consensual...interest
UCC article 9 covers instruments of commerce including Mortgages.
Article 9 of the UCC, uses the term “mortgage” to include a consensual interest in real property to secure an obligation whether created by mortgage, trust deed, or the like. It says a mortgage includes a “consensual interest” in real property to secure an obligation (to repay the debt) whether created by a mortgage, trust deed (deed of trust) or the like. See the link here to the UCC PEB November 14, 2011 document”
So back in the day, when everyone who had a pulse got a mortgage, did mortgage applicants, who later became approved borrowers, know, consent to, WHEN (AT the time) they were signing their mortgage docs (promissory note and mortgage, deed of trust and the like) the real, indispensable and fraudulent cause of house prices rocketing further and further north and out of their reach?
Has anyone ever mentioned the CSE program to you? Let me cut to the chase.
See the attached testimony from Kyle Bass, January 2010 to the FCIC – go to page 13, flip it sideways, and print it out. You will see about half way down the line that says gross leverage to tangible common equity; that my friends is a fancy term for a financial shock absorber. You might ask “How could this be – when for decades such leverage was kept to the single or low double digits?” Keep this handy; I’ll explain why in one sentence with 15 bullets: One note, not all were CSE's but the majority were.
In 2004, your friends at the SEC (Securities Exchange Commission) approved the CSE program for only the “largest, most sophisticated investment banks;” (that’s a verbatim quote and I recall that it was stated more than once). The CSE program, enabled the investment banks to:
1) figure out their own capital cushions – overturning a 30 year old rule;
2) use their own models to determine #1;
3) use their own values for securities they held for their own profit;
4) is it a surprise, that as a result the amount of assets (and contingent liabilities) surged to over 30 times their capital, and as of 2008 it got worse than that?
5) Who were the CSE’s?
6) You’ve heard of the CSE program before right?
7) You know it was created when? Answer 2004. And it was terminated on? September 26, 2008 exactly five days after two CSE’s applied for a sex change to a BHC – no, silly that means a Bank Holding Company; (so they could borrow on the sly AND on the cheap from the Fed’s discount window);
8) Why has it taken until now, New Years Day 2012, fully 3 plus years AFTER the so-called financial crisis to tell you that if it weren’t for the CSE’s we wouldn’t have a foreclosure crisis or much less a financial crisis; just good ole; plain vanilla, safe and sound banking system;
9) But the bonuses (based on model values) were just a little too tempting for some at the CSE’s, now called TBTF banks or officially known as SIFI's;
10) Oh, I forgot to mention the answer to question #5; I’ll just provide the link and you can read for yourself here -
11) And if you have 4 minutes you can listen to the excellent narration of the CSE program by the NY Times’ Stephen Labaton here
12) If you have 55 minutes you can actually listen to the 2004 hearing wherein the 5 SEC commissioners prompted by the Staff and a 400 plus page briefing book, approved the CSE program – go back to the link under #10, scroll down the left side bar, there’s a VERY tiny link – you have to click where it says “(mp3)” At about the 20 minute mark you will hear who the CSE's had building the models; fascinating stuff.
13) In case you hadn't noticed - the word "market" did not appear in items #1, #2, or #3 above - and why is that? Because the CSE's proprietary computer MODELS led to the housing bubbles - the two of them - price and overbuilding. MARKETS which we all know are transactions among arms-length parties, for MBS, CDOs etc. did not occur on anything like a regular basis. What if a few extra trillions (plural) of supposedly Mortgage backed securities were to trade; i.e. to hit the market? Like the Japanese tsunami, the extra trillions washed away the trillions of paper wealth just as swiftly and as surely as the flood waters overtook northern Japan; except this, my friends, was no act of God.
14) If you were listening carefully to the 55 minute hearing ; you did hear that the "models" were 1) supposed to be approved in advance and 2) monitored and 3) adjusted over time - correct? Want to take a guess what happened in reality? I'll bet you might know, NOW, the answer.
15) I just found a fitting quote for the last bullet:
During 2008, [ALL] the CSE institutions failed, were acquired, or converted to bank holding companies which enabled them to access government support. The CSE program was discontinued in September 2008 by former Chairman Christopher Cox.
Testimony to US Congress' House Financial Services Committee, Mary Schapiro, Chair, US Securities and Exchange Commission, April 2010 [emphasis added].
More to come on the 2004 SEC CSE program too…
Happy/ier 2012!
Article 9 of the UCC, uses the term “mortgage” to include a consensual interest in real property to secure an obligation whether created by mortgage, trust deed, or the like. It says a mortgage includes a “consensual interest” in real property to secure an obligation (to repay the debt) whether created by a mortgage, trust deed (deed of trust) or the like. See the link here to the UCC PEB November 14, 2011 document”
So back in the day, when everyone who had a pulse got a mortgage, did mortgage applicants, who later became approved borrowers, know, consent to, WHEN (AT the time) they were signing their mortgage docs (promissory note and mortgage, deed of trust and the like) the real, indispensable and fraudulent cause of house prices rocketing further and further north and out of their reach?
Has anyone ever mentioned the CSE program to you? Let me cut to the chase.
See the attached testimony from Kyle Bass, January 2010 to the FCIC – go to page 13, flip it sideways, and print it out. You will see about half way down the line that says gross leverage to tangible common equity; that my friends is a fancy term for a financial shock absorber. You might ask “How could this be – when for decades such leverage was kept to the single or low double digits?” Keep this handy; I’ll explain why in one sentence with 15 bullets: One note, not all were CSE's but the majority were.
In 2004, your friends at the SEC (Securities Exchange Commission) approved the CSE program for only the “largest, most sophisticated investment banks;” (that’s a verbatim quote and I recall that it was stated more than once). The CSE program, enabled the investment banks to:
1) figure out their own capital cushions – overturning a 30 year old rule;
2) use their own models to determine #1;
3) use their own values for securities they held for their own profit;
4) is it a surprise, that as a result the amount of assets (and contingent liabilities) surged to over 30 times their capital, and as of 2008 it got worse than that?
5) Who were the CSE’s?
6) You’ve heard of the CSE program before right?
7) You know it was created when? Answer 2004. And it was terminated on? September 26, 2008 exactly five days after two CSE’s applied for a sex change to a BHC – no, silly that means a Bank Holding Company; (so they could borrow on the sly AND on the cheap from the Fed’s discount window);
8) Why has it taken until now, New Years Day 2012, fully 3 plus years AFTER the so-called financial crisis to tell you that if it weren’t for the CSE’s we wouldn’t have a foreclosure crisis or much less a financial crisis; just good ole; plain vanilla, safe and sound banking system;
9) But the bonuses (based on model values) were just a little too tempting for some at the CSE’s, now called TBTF banks or officially known as SIFI's;
10) Oh, I forgot to mention the answer to question #5; I’ll just provide the link and you can read for yourself here -
11) And if you have 4 minutes you can listen to the excellent narration of the CSE program by the NY Times’ Stephen Labaton here
12) If you have 55 minutes you can actually listen to the 2004 hearing wherein the 5 SEC commissioners prompted by the Staff and a 400 plus page briefing book, approved the CSE program – go back to the link under #10, scroll down the left side bar, there’s a VERY tiny link – you have to click where it says “(mp3)” At about the 20 minute mark you will hear who the CSE's had building the models; fascinating stuff.
13) In case you hadn't noticed - the word "market" did not appear in items #1, #2, or #3 above - and why is that? Because the CSE's proprietary computer MODELS led to the housing bubbles - the two of them - price and overbuilding. MARKETS which we all know are transactions among arms-length parties, for MBS, CDOs etc. did not occur on anything like a regular basis. What if a few extra trillions (plural) of supposedly Mortgage backed securities were to trade; i.e. to hit the market? Like the Japanese tsunami, the extra trillions washed away the trillions of paper wealth just as swiftly and as surely as the flood waters overtook northern Japan; except this, my friends, was no act of God.
14) If you were listening carefully to the 55 minute hearing ; you did hear that the "models" were 1) supposed to be approved in advance and 2) monitored and 3) adjusted over time - correct? Want to take a guess what happened in reality? I'll bet you might know, NOW, the answer.
15) I just found a fitting quote for the last bullet:
During 2008, [ALL] the CSE institutions failed, were acquired, or converted to bank holding companies which enabled them to access government support. The CSE program was discontinued in September 2008 by former Chairman Christopher Cox.
Testimony to US Congress' House Financial Services Committee, Mary Schapiro, Chair, US Securities and Exchange Commission, April 2010 [emphasis added].
More to come on the 2004 SEC CSE program too…
Happy/ier 2012!
Friday, December 9, 2011
Merrill announces the NEW rules for investing - so what were the old rules? Or should we revisit Merrill's 1998 Annual Report?
While on drive time today, a commercial interruption brought to you by Merrill Lynch Private Wealth Management beckoned would be customers to learn the "new rules for investing" - last I checked the securities industry was fighting tooth and nail against a fiduciary standard.
But MORE inportantly what were the "old" rules?
Perhaps we could go back to Merrill's 1998 annual report wherein it stated - as captured in Roger Lowenstein's LTCM tome "When Genius Failed"
see page 235, "Merrill Lynch uses mathematical risk models to help estimate its exposure to market risk" as Lowesntein wrote, in a phrase that suggested some slight dawning awareness of the dangers of such models, the bank added that they "may provide a greater sense of security than warranted; therefore, reliance on these models should be limited".
However, it appears that when it came time to lobby the SEC to create the 2004 vintage CSE (Consolidated Supervised Entity) program "only for the largest and most sophisticated broker dealers" the annual report writers and or signatories had had a technologic transformation only to be undone in a mere four years; as the Chairman Cox ended the infamous CSE program on September 26, 2008.
However, still today those models' valuations are wreaking havoc the world over and then some; some "markets"! What would US and or EU regulators today think of the opportunities they lost from not having passed their eyes over the prescient words from mother Merrill and taken counsel! How many foreclosures could have been avoided? How many bonuses could have been avoided? Oops or perhaps that's the reason they forgot to read - anything?
But MORE inportantly what were the "old" rules?
Perhaps we could go back to Merrill's 1998 annual report wherein it stated - as captured in Roger Lowenstein's LTCM tome "When Genius Failed"
see page 235, "Merrill Lynch uses mathematical risk models to help estimate its exposure to market risk" as Lowesntein wrote, in a phrase that suggested some slight dawning awareness of the dangers of such models, the bank added that they "may provide a greater sense of security than warranted; therefore, reliance on these models should be limited".
However, it appears that when it came time to lobby the SEC to create the 2004 vintage CSE (Consolidated Supervised Entity) program "only for the largest and most sophisticated broker dealers" the annual report writers and or signatories had had a technologic transformation only to be undone in a mere four years; as the Chairman Cox ended the infamous CSE program on September 26, 2008.
However, still today those models' valuations are wreaking havoc the world over and then some; some "markets"! What would US and or EU regulators today think of the opportunities they lost from not having passed their eyes over the prescient words from mother Merrill and taken counsel! How many foreclosures could have been avoided? How many bonuses could have been avoided? Oops or perhaps that's the reason they forgot to read - anything?
Tuesday, November 1, 2011
Be careful, someone's gonna get hurt...
Yes, things parents say, or an ode to George Carlin.
Picture the time when you were kids, and you were on a see saw, balanced by your friend who was on the other end; OH what great fun, and giggles and laughs, up and down, up and down, and the giggles and laughs wafted all over the playground; then up and down sped up, then you were overcome, all of a sudden out of nowhere, by the great silliness, soon other kids heard and saw what loads of fun and silliness was to be had and they wanted to sit on your side too; then more kids joined; then one suddenly jumped off one end and the kids on the other end went ploof, banging their heads, breaking arms and dislocating shoulders as they spilled onto the play ground pavement, like scatter shots.
Pity, before 2008, certain TBTF banks' didn't remember that lesson of leverage implicit in the children's frolic of see saw; for it is indeed great fun for BOTH sides of the see saw when it's a balanced game; except TBTF banks', knew at the time WHY house prices were rocketing north, but somehow forgot to inform mortgage borrowers that their leverage bets were being doubled, not carefully underwritten if at all, and hidden and upped, to be fueled by an relentless push for more new mortgage, often no-money down 2nd, 3rd, 4th house, borrowers (mind you primarily if not nearly only within GSE conforming loan limits) who fully thought they were playing real estate see saw but in reality were being suckered, make that defrauded into believing that house prices were going up due to market (make that FREE MARKET, some would recognize that as Capitalism) forces...
Picture the time when you were kids, and you were on a see saw, balanced by your friend who was on the other end; OH what great fun, and giggles and laughs, up and down, up and down, and the giggles and laughs wafted all over the playground; then up and down sped up, then you were overcome, all of a sudden out of nowhere, by the great silliness, soon other kids heard and saw what loads of fun and silliness was to be had and they wanted to sit on your side too; then more kids joined; then one suddenly jumped off one end and the kids on the other end went ploof, banging their heads, breaking arms and dislocating shoulders as they spilled onto the play ground pavement, like scatter shots.
Pity, before 2008, certain TBTF banks' didn't remember that lesson of leverage implicit in the children's frolic of see saw; for it is indeed great fun for BOTH sides of the see saw when it's a balanced game; except TBTF banks', knew at the time WHY house prices were rocketing north, but somehow forgot to inform mortgage borrowers that their leverage bets were being doubled, not carefully underwritten if at all, and hidden and upped, to be fueled by an relentless push for more new mortgage, often no-money down 2nd, 3rd, 4th house, borrowers (mind you primarily if not nearly only within GSE conforming loan limits) who fully thought they were playing real estate see saw but in reality were being suckered, make that defrauded into believing that house prices were going up due to market (make that FREE MARKET, some would recognize that as Capitalism) forces...
Thursday, October 27, 2011
After doing God's work they...applied for gun permits
Why would that be?
See Bloomberg article from 2009. It's sort of interesting that the release of requested information has not been reported on...
http://www.bloomberg.com/news/2009-12-03/arming-goldman-sachs-with-pistols-alice-schroeder-correct-.html
I wonder if this is Goldman's version of a new "quiet period"?
Arming Goldman Sachs With Pistols: Alice Schroeder
By Alice Schroeder - Dec 3, 2009 Bloomberg Opinion
(Corrects second paragraph of story published Dec. 1 to say the New York Police Department believes some bankers may have received handgun permits.)
“I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter, it appears that some of the records you requested may be in the possession of this department” after I asked for information on approved handgun permits for bankers. The NYPD also said it will be a while before it can name names.
While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”
Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.
Pistol Ready
Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.
In other words, a little humility and contrition are probably the better route.
Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.
To the Barricades
He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.
This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.
So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?
Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”
Torn Curtain
There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.
This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.
Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.
Cool Hand Lloyd
No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
(Alice Schroeder, author of “The Snowball: Warren Buffett and the Business of Life” and a former managing director at Morgan Stanley, is a Bloomberg News columnist. The opinions expressed are her own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
To contact the writer of this column: Alice Schroeder at aliceschroeder@ymail.com.
To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net
.
See Bloomberg article from 2009. It's sort of interesting that the release of requested information has not been reported on...
http://www.bloomberg.com/news/2009-12-03/arming-goldman-sachs-with-pistols-alice-schroeder-correct-.html
I wonder if this is Goldman's version of a new "quiet period"?
Arming Goldman Sachs With Pistols: Alice Schroeder
By Alice Schroeder - Dec 3, 2009 Bloomberg Opinion
(Corrects second paragraph of story published Dec. 1 to say the New York Police Department believes some bankers may have received handgun permits.)
“I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter, it appears that some of the records you requested may be in the possession of this department” after I asked for information on approved handgun permits for bankers. The NYPD also said it will be a while before it can name names.
While we wait, Goldman has wrapped itself in the flag of Warren Buffett, with whom it will jointly donate $500 million, part of an effort to burnish its image -- and gain new Goldman clients. Goldman Sachs Chief Executive Officer Lloyd Blankfein also reversed himself after having previously called Goldman’s greed “God’s work” and apologized earlier this month for having participated in things that were “clearly wrong.”
Has it really come to this? Imagine what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology. Talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage.
Pistol Ready
Common sense tells you a handgun is probably not even all that useful. Suppose an intruder sneaks past the doorman or jumps the security fence at night. By the time you pull the pistol out of your wife’s jewelry safe, find the ammunition, and load your weapon, Fifi the Pomeranian has already been taken hostage and the gun won’t do you any good. As for carrying a loaded pistol when you venture outside, dream on. Concealed gun permits are almost impossible for ordinary citizens to obtain in New York or nearby states.
In other words, a little humility and contrition are probably the better route.
Until a couple of weeks ago, that was obvious to everyone but Goldman, a firm famous for both prescience and arrogance. In a display of both, Blankfein began to raise his personal- security threat level early in the financial crisis. He keeps a summer home near the Hamptons, where unrestricted public access would put him at risk if the angry mobs rose up and marched to the East End of Long Island.
To the Barricades
He tried to buy a house elsewhere without attracting attention as the financial crisis unfolded in 2007, a move that was foiled by the New York Post. Then, Blankfein got permission from the local authorities to install a security gate at his house two months before Bear Stearns Cos. collapsed.
This is the kind of foresight that Goldman Sachs is justly famous for. Blankfein somehow anticipated the persecution complex his fellow bankers would soon suffer. Surely, though, this man who can afford to surround himself with a private army of security guards isn’t sleeping with the key to a gun safe under his pillow. The thought is just too bizarre to be true.
So maybe other senior people at Goldman Sachs have gone out and bought guns, and they know something. But what?
Henry Paulson, U.S. Treasury secretary during the bailout and a former Goldman Sachs CEO, let it slip during testimony to Congress last summer when he explained why it was so critical to bail out Goldman Sachs, and -- oh yes -- the other banks. People “were unhappy with the big discrepancies in wealth, but they at least believed in the system and in some form of market-driven capitalism. But if we had a complete meltdown, it could lead to people questioning the basis of the system.”
Torn Curtain
There you have it. The bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one. Goldman Sachs blew its cover when the firm’s revenue from trading reached a record $27 billion in the first nine months of this year, and a public that was writhing in financial agony caught on that the profits earned on taxpayer capital were going to pay employee bonuses.
This slip-up let the other bailed-out banks happily hand off public blame to Goldman, which is unpopular among its peers because it always seems to win at everyone’s expense.
Plenty of Wall Streeters worry about the big discrepancies in wealth, and think the rise of a financial industry-led plutocracy is unjust. That doesn’t mean any of them plan to move into a double-wide mobile home as a show of solidarity with the little people, though.
Cool Hand Lloyd
No, talk of Goldman and guns plays right into the way Wall- Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the doors of Park Avenue and the gates of Round Hill Road, you can be sure that the Goldman guys and their families will be holed up in their safe rooms with their firearms. If nothing else, that pistol permit might go part way toward explaining why they won’t be standing outside with the rest of the crowd, broke and humiliated, saying, “Damn, I was on the wrong side of a trade with Goldman again.”
(Alice Schroeder, author of “The Snowball: Warren Buffett and the Business of Life” and a former managing director at Morgan Stanley, is a Bloomberg News columnist. The opinions expressed are her own.)
Click on “Send Comment” in the sidebar display to send a letter to the editor.
To contact the writer of this column: Alice Schroeder at aliceschroeder@ymail.com.
To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net
.
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