Smartest Guys or Human Excrement

i thought you said i was sloppy....did i misunderstand?

you do realize that over 3/4's of RS's posts are straight cut and paste's with absolutely no original content. and more than half are completely out of context.

and, whenever challenged, RS simply changes the subject and has another barrage of posts.

"i still don't understand why you continue to defend RS. what's your angle?" I don't continue to defend RS, I continue call you out for stalking (although note that I've been silent for, what, maybe two months now, while you've gone right on stalking RS with your snippy personal attacks. If you were stalking someone with the screenname "randomposterX" I'd be doing the same thing.

as i've asked repeatedly, whats the difference between what you're doing and what i'm doing?

"i thought you said i was sloppy....did i misunderstand?" Yes, you misunderstood. I said that I think RS is sloppy - arguments that don't follow from what he posts, etc. - where ar sees the same thing and sees mendacity.

lets remember that you can't open up SE without seeing at least a dozen RS cut and pastes.

"as i've asked repeatedly, whats the difference between what you're doing and what i'm doing?" for one, I haven't gone after you once in what, 2 months? I've lost count of how many times in that span you've jumped on RS just for showing up on a thread.

Sideline,
I'm consistent. Not every article has to express one's opinion. Some are just things I find interesting. My views are a little complex. I could see confusion about being against credit default swaps, but not liking Barney Frank and his housing policies. I also have a view of how regulation of financial markets work and doesn't work. And the point of Ayn Rand is we can't tax so highly that we discourage people from generating wealth. I'm for a flat tax basically. But just as I have a libertarian bent, that doesn't mean I think we should abolish government.

Of course anyone could troll through posts and put together something that contradicts. Hell, two people could come up with different collections of bible passages and say G-d had different intentions.

so its a matter of numbers? wouldn't the relevant statistic be the number of times that I don't comment on RS vs total RS posts rather than the number of times that you comment?

by the way....is mendacity a fancy term for dickhead?

sls, i don't buy it. the guy quotes sources endlessly. i disagree with much of what he says, and many of his arguments are sloppy, but i wouldn't call him unintelligent. if you're going to post so often to prove your points, i think you have an obligation to read your source material. and i've seen far too many instances where it was clear it was not mere sloppiness.

"not every article has to express one's opinion."

huh? how about expressing your own opinion rather than endlessly posting endless articles.

you're "complex." while you have zero problem with reducing my views to "champagne liberal." i don't see a lot of complexity, RS. but maybe that's because when asked to defend your opinion you claim it's just something you find "provocative." maybe you should start posting disclaimers? i don't agree with this article but i'm wasting time and posting it anyway. because life's too long and there are too few things to post.

maybe you should start posting disclaimers?
that's funny, i'm laughing. thank you

btw falco, excrement.

nice chatting guys. i'm off to kill some brain cells.

LOL at ar post three posts above

Everyone: I can barely keep track of who posted what 10 posts ago, when it comes to non-RE stuff, let alone 1 year ago.

Back to Goldman

William Black And Barry Rithotz have an interesting Goldman disussion
http://www.ritholtz.com/blog/2010/04/bill-black-and-i-react-to-goldman-fraud-charges/

Holy stinking crap. Not since I read materials by Robert Kiyosaki (Rich Dad Poor Dad) have I ever read something so meaningless. What does someone do after reading this???????

The solution is never going to be about singling out one group and taking away their money. As soon as we can get past that, we may be able to start tackling the problem for real.

so...here's how we get started.

a politician stands up and says: there are no easy answers anymore. for a viable future, we need to have shared sacrifice. rather than try to figure out how and which programs to cut, lets start with a lengthy dialogue aimed at creating a process that is fair.

fair is not about winning or losing. and the old adage about life not being fair is true. while i'm citing cliches, how about: we are where we are. whining and complaining about how we got here and trying to retroactively change things is never going to work. i don't pretend to have answers; as i said earlier, i think a conversation needs to begin about defining a process to go forward. without slogans, without agendas other than to make the most of what we have.

careful. we're trying to have a dialogue about process and you're citing details. for every stupid policy on one side of the equation, there is an equally stupid one on the other side. fox news is making $700 million a year pointing fingers; good for them and bad for the rest of us. msnbc just isn't as good at it.

The favorite part, straight out of an episode of The West Wing with Martin Sheen:

a politician stands up and says: there are no easy answers anymore. for a viable future, we need to have shared sacrifice. rather than try to figure out how and which programs to cut, lets start with a lengthy dialogue aimed at creating a process that is fair.

And this meaningless laugh:
i think a conversation needs to begin about defining a process to go forward.

Let's not yet take action or "go forward"
Let's not yet even work on a "process" to go forward
We can't even "define" how we will have a process to go forward
And we can't even have a commitment to determining how to have a process to go forward
We have to BEGIN to have a CONVERSATION to DEFINE A PROCESS to "go forward"

Unbelievable. Thank you for those words of wisdom Mr. Kiyosaki. Our problems will all be solved shortly.

Oh, and a politician will help us begin that conversation by standing up and telling us all to be FAIR.

I hate people who just talk and use big words to seem smart but actually say nothing.

Or, I hate people who begin to move their lips in order to start the process of forming words with their mouths as the first stages in the process of going down the path of creating a sentence as the initial stage in stating an idea. Fairly.

are you a new friend or an old one?

Hey, Mr. Kiyosaki. I want my $19.99 back.

ah...an old friend. who are you?

http://online.wsj.com/article/SB116052181216688592.html?mod=money_page_left_hs

I will stand up shortly and proclaim in due course that I will begin the process of starting a conversation to tell you that there are no easy answers and that we must be patient because we eventually may reach the conclusion that change and hope and fairness are good and are potentially deemed to be better than blaming people who may not have the tendencies to be disposed to an orientation toward subjective fairness.

The banksters should all be facing RICO indictments. They were engaged in fraudulent transactions that had absolutely zero economic benefit. It was a rigged casino pure and simple.

Abacus Let Goldman Shuffle Mortgage Risk Like Beads
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSc0uzZCL36I&pos=2#

April 17 (Bloomberg) -- From July 2004 through April 2007, as credit markets boomed, Goldman Sachs Group Inc. created 23 financial transactions called Abacus, the word for a relatively crude counting tool involving the shuffling of beads.

Yesterday, the Securities and Exchange Commission sued the bank for securities fraud in what would be the penultimate offering in the series, according to Bloomberg data.

The bank used the deals to off-load the risk of mostly subprime home loans and commercial mortgages to investors, either as hedges for similar positions or to bet against securities itself. While the data show New York-based Goldman Sachs issued at least $7.8 billion of Abacus notes, the risk passed to investors was multiples higher.

The Abacus transactions are so-called synthetic collateralized debt obligations, which marry two financial innovations that contributed to the worst collapse in financial markets since the Great Depression. [...=

http://www.youtube.com/watch?v=N5J0YqEYJn0

Kotlikoff talks about transparency and disclosure and treating customers like customers and not counter-parties(i mean suckers)

Fantastic! GS is Down! Great buying opportunity I say! Double down! Europe snooping around about gs in Greece leverage workaround! Triple down! New financial regs! Double down again! Oh boy the greatest financial buying opportunity, just like manhattan re in the last month! Oh yeah, that's right we are ALL competing against these mega bonus boners for years to come, right? Flmao. If you don't know it by now, big financials are dead weight for several years if they ever come back.

Here is why they are dead. Regional mega financials will almost always lead to lending excess. How do you cover up bad credit lending, well wih more bad credit lending. And if the little guy crys uncle, well you buy them up and put in the mega financials credit criteria (no credit review), then use every acctg trick to delever at quarter end. And there in lies the seeds of it's own demise and taxpayers on the hook.

Fwiw, 3 questions that were asked on every transaction when I was in banking
1) what's the primary purpose of the transaction;
2) will the principal be paid back,
3) what's our roe.
If 1 is to make you look financially stronger/window dressing, you'd take a pass. Looks like Goldman put 2 And 3 before 1, a no no.

can someone help me understand something. from what i've read, ACA was the biggest investor in Abacus and also the portfolio selector. So, they knew exactly what was being put in Abacus. Does it matter whether the original list of mortgages was generated by Paulson? either way, GS is scum and I hope they fall, but it seems like a pretty weak case overall.

did you read this part?

38. Similarly, a 65-page flip book for ABACUS 2007-AC1 finalized by GS&Co on or about February 26, 2007 represented on its cover page that the reference portfolio of RMBS had been “Selected by ACA Management, LLC.” The flip book included a 28-page overview of ACA describing its business strategy, senior management team, investment philosophy, expertise, track record and credit selection process, together with a 7-page section of biographical information on ACA officers and employees. Investors were assured that the party selecting the portfolio had an “alignment of economic interest” with investors. This document contained no mention of Paulson, its economic interests in the transaction, or its role in selecting the reference portfolio.

ACA was the portfolio selection agent big dude. I haven't seen any reference to ACA as being the biggest long made anywhere except by Goldman. I'd hold off on assuming that is correct. Goldman hasn't been totally honest, not disclosing the Wells notice and claiming they were surprised by the SEC action which isn't totally true. We also don't know yet what Germany will do here. IKB lost big and needed a bailout. So you have a foreign government who may press for damages.

There is speculation tonight that Blankfein will be out. I think this has merit. Prior to Blankfein, Goldman was managed from the banking side and not the trading side. This is very damaging to Goldman's client first reputation. I see this getting worse for them before getting better.

http://www.welt.de/wirtschaft/article7225859/US-Bankenskandal-schuert-Angst-vor-neuer-Krise.html

The case is hot for Germany as the Mittelstand bank IKB from Düsseldorf in April 2007 was one of the major users of the papers. The subsidiary of state-owned development bank KfW has invested around 150 million dollars in CDOs. IKB was saved in the summer of 2007 only with government assistance billion. Berlin also is now considering legal action against Goldman Sachs: "The financial Bafin will make a request to the SEC," said government spokesman Ulrich Wilhelm der "Welt am Sonntag". "After a careful evaluation of the documents, we will consider legal action."

one of the lovely things (depending on your perspective) about filing a suit that survives any initial motion to dismiss is that you have discovery. you have access to very interesting info.

Yet another explanation of Abacus
http://www.creditslips.org/creditslips/2010/04/explaining-the-abacus-cdo.html#more

Goldman, the SEC alleges, constructed the CDO as a bespoke deal for Paulson, so there would be someone taking the long position against his short. Goldman took a nice fee for this and is alleged to also have taken a short position (I'm not clear at this point if it was short on the MBS or if it bought CDS protection on the Abacus CDO, thereby taking a short position on the CDO, which is a derivative bet on Paulson's short).

There are a lot of acronyms floating around here. It's easier to understand the alleged fraud by analogy. Think of Goldman as a fight promoter (Don King, as it were). The promoter arranges the fight. If the promoter is betting on the fight, there's a potential problem, though, as the promoter has the ability to fix the fight. This basic fraud routine goes back to time immemorial. The promoter arranges a fight between a big guy and a wimp. Everyone bets on the big guy, except the promoter. The promoter tells the big palooka that he's going down in the 6th round (and maybe gives him a cut). The marks in the crowd get fleeced.

The fight analogy also shows very clearly what the problem is. The arranger of a fight (or deal) shouldn't be betting on it.

Riversider,

http://blogs.reuters.com/felix-salmon/2010/04/16/goldmans-abacus-lies/

seems like ACA Management picked the securities, but ACA Capital (an affiliate) wrote the protection? Ignoring GS' role for a sec since they are sleaze regardless of the truth in thsi case, but seems like ACA was a big boy that got burned...

overall though, if this is really the SEC's best case against wall street, it feels pretty weak. i would've thought they'd be able to dig up a lot more dirt than this. maybe there are more cases coming, but i'm surprised you'd lead with this one if you did.

didn't this all start on Paulson's watch? anyway, bigdude since you are posting to salmon, i'm sure you've seen this as well but i didn't see it posted elsewhere and it is an easily digestible summary. oh, and RS, i'd already posted the black/ritholtz link.

http://blogs.reuters.com/felix-salmon/2010/04/17/how-aca-was-misled/

AR, saw that. Agreed that GS is sleaze. But was what they did really illegal? I mean, ACA is a sophisticated investor, they picked the securities that went into the CDO and wrote the protection. Does it really matter whether Paulson was revealed as being short the other side? I trade all day and typically have no idea who's on the other side. Again, not questioning that GS was the latter of the two choices in the thread title, but to bring charges on this? Seems weak.

but ACA Capital (an affiliate) wrote the protection?
No the investors who purchased the cdo bond wrote the protection. Paulson was short the credit, the cdo buyers were long the credit.

They really should not be calling Abacus a CDO. How about tiered insurance product. Synthetic CDO'S buyers are not really bond holders but Credit tiered writers of Credit default swap protection to someone shorting credit. Calling Abacus a bond, made it seem far more mundane and harmless than it really was. There really is a limit to how much kicking of the tires someone buying a AAA rated low yielding security is likely to do. Goldman took advantage of that.

RS - pretty sure that ACA Capital wrote the vast majority of the protection. i could be wrong though since this isn't exactly my world.

bigdude, from what i've read it would be considered fraud. how good of a case do they have? why did they not name anyone higher up? dunno, but it would be kind of embarrassing for the administration to go after paulson, no? i personally think the sec is liable to screw it up, but now brown is asking for a UK investigation as well. maybe there are some benefits to global banking?

at the very minimum this is a fantastic political machination. it comes at a time when financial regulation is being fiercely resisted by the banks, and the administration has even asked chase and gs to quit lobbying against the reforms. i would guess that the administration got the same response it has to everything it has tried, a big fat flipping of the bird. the arrogance is incredible. the president holds meetings and requests the presence of the top bankers, sorry can't attend. could they show some restraint on pay? sorry, no we can't. but now how can anyone argue that something needs to be done to control the banks? it would be political suicide to resist reform now.

the banks have been saying fuck you to the administration endlessly. kind of a hey what you going to do, we can destroy the world if you don't protect us and you know it attitude. what did they expect?

they certainly weren't busy "doing God's work."

what a tool. dr. evil in a business suit.

maybe i've watched too much tv but i would venture that the SEC didn't name anyone higher up because they don't believe they have as good a case as they do against the lower guy unless, of course, they get him to testify about his superiors. either way, GS has a problem because if they come to a position that says the lower guy is a one off rogue and another similar example surfaces, they're screwed.

it will be interesting to watch republicans in congress dance around all this as the reform legislation moves forward.

actually, cc, it was probably prudent not to go higher. start with the strongest case. complaints can be amended, parties can be added.

agree that this makes interesting theater.

bigdude, you aren't completely understanding the transaction. If the facts alleged are true, what Goldman did was illegal and they will take a huge hit.

If the SEC is looking to go after Goldman, they aren't going to necessarily choose the case with the most drama. They will choose the case in which they have the best evidence.

aboutready, let's see if you can go one month on streeteasy without using profanity. Just try it. Start now . . .

licc, let's not. oh, and piss off.

I know it would be incredibly difficult for you to act classy aboutready, but just try. How about this- if you can go one month without a profanity, I will go a month without making any comments pointing out the weaknesses in your statements or how disgusting your views are. I'll give you another chance. Start . . . now.

when does your deployment begin?

you presume that i care about your comments, licc. actually, i have you on ignore and only look when i'm in a cheerful mood. despite my limited and random viewing of your comments, i do notice how focused you seem. do i fascinate you so? i suggest you put me on ignore.

"how disgusting your views are." speaking of classy. i do not think you know the meaning of this word. i wouldn't want "another chance" from someone like you. go back to your swamp, asshole.

now, back to the topic at hand, let the games begin.

http://www.calculatedriskblog.com/2010/04/uk-germany-consider-action-against.html

Well that lasted 11 minutes. I guess it is too hard for aboutready to get out of the gutter.

is the asshole back? what's he saying? oh, right, i don't care.

RS - pretty sure that ACA Capital wrote the vast majority of the protection.

I did read that. I'm from Missouri so waiting for ACA to confirm this somewhere. If true
it puts them in the same league as AIG & MBIA and we saw what happened there. But keep
in mind they used ACA'S name for the marketing materials, so there were other investors.
I'm not believing anything that Goldman says on this until it's confirmed. Seems to
much work went into the pitch book if this were merely a private transaction between
Paulson and ACA.

http://online.wsj.com/article/SB10001424052748704246804575190282951109738.html?mod=WSJ_latestheadlines

Well, If the ACA position is true. AIG likes to blow up mono-lines. ACA insures a fair number of muni bonds too

Goldman denies the charges against it.

In Friday's complaint, the SEC said Fabrice Tourre, the Goldman executive principally responsible for the transaction, knew of Paulson's undisclosed short interest and its role in the collateral-selection process but "misled ACA into believing that Paulson invested approximately $200 million" in the equity of the transaction. This made it seem as if Paulson's interests in the collateral-selection process "were aligned with ACA's when in reality Paulson's interests were sharply conflicting," the agency said.

As early as 2007, ACA ran into financial trouble. Things took a turn for the worse in December that year when S&P cut the insurer's rating to a junk grade triple-C, saying it had "significant doubt" that the firm could come up with enough capital to meet its obligations.

The downgrade required ACA to provide more collateral to back insurance it had written, primarily in the market for credit-default swaps, which provides protection against bond defaults. ACA would have had to post "at least $1.7 billion," according to a company filing with the SEC in November 2008. That figure, it seems, may have risen much higher because credit-risk premiums rose sharply after that.
-----------------------------------------------------

http://www.aca.com/about/
ABOUT ACA

Founded in 1997, ACA Financial Guaranty Corporation is a monoline bond insurance company licensed in 50 states and 5 territories and regulated by the Maryland Insurance Administration.

On August 8, 2008, the Company and counterparties to its structured finance products reached an agreement on a restructuring plan for ACA. The plan, approved by the Maryland Insurance Administration, provided for settlement of the structured finance obligations and protection for ACA’s municipal policyholders. ACA will operate as a runoff insurance company and focus on actively monitoring its remaining insured municipal obligations.

ACA’s portfolio consists of approximately 700 policies guarantying timely payment of principal and interest

aboutready
about 6 months ago
ignore this person
report abuse is the asshole back? what's he saying? oh, right, i don't care.

HOW IRONIC