Commenter Steve sums up what Goldman did very succinctly:
What Goldman knew is that they had an investor (Paulson) who wanted to create an investment and take the short side of it, but that no one would want to buy it if they knew the component parts had been self-selected by the person on the other side of the bet. So they used ACA as a sham intermediary, and told investors that the component parts had been selected by this objective third party.
A little more Felix Salmon (who has this one wrapped like a mummy):
It makes a lot of sense here to do the old-fashioned thing and follow the money. Why was ACA so quiet about the fact that it wasn’t really picking the securities in the CDO it was nominally managing? Because it was being paid millions of dollars for its silence. And why was Goldman so happy to do Paulson’s bidding? Just look at the complaint.
The deal closed on April 26, 2007. Paulson paid GS&Co approximately $15 million for structuring and marketing ABACUS 2007-AC1.
Even by Goldman standards, that’s real money. But the fact is that the investors in the deal had every right to know who was paying the piper — and Goldman went to great lengths to keep that fact secret.
[…..]Goldman talks ad nauseam about how everything it does it does for its clients, and how any profits it ultimately ends up making are just a result of being “long-term greedy”. But if it attempts legalistic hair-splitting about how its behavior in the Abacus case was technically not illegal, it’s just going to end up looking even more culpable in the eyes of its clients. Goldman, if it was behaving honorably here, would have been open about the whole truth of what was going on.
This is bank-on-bank violence, so it’s not even clear that the Santellistas will defend Goldman.
Although this matter is somewhat separate from fin reg legislation, it will take a Herculean Luntzian effort to disentangle the two in the public’s mind. It should be awfully easy for Democrats to call Republicans the party of Goldman-Sachs as the fin reg debate rages on.
Phoenix Woman
Goldmine Sacks.
Bnut
I’m not sure calling the GOP the party of Goldman is a good idea when you look at some of the people working for the current administration. Not that the GOP isn’t, it’s just a hard media point to sell IMO.
PeakVT
This is bank-on-bank violence
I’m going to need a bigger bag of popcorn.
Comrade Luke
@PeakVT:
Looks like we’re gonna need a bigger boat…
Steeplejack
__
Keith
If history is any indicator, it will be the other way around, and the media will sell this story to the public as if they were the ACA in their own little financial ecosystem. Hell, by the end of all of this, 6 out of 10 Americans will believe that Hank Paulson was appointed as bailout czar by Obama sometime while he was measuring the WH drapes.
rootless-e
What blows me away on this is IBK. They acted with all the smarts and investing acuity of a 94 year old illiterate signing away his social security check.
jl
Economists like me say that the creative destruction of the market is part of the genius of capitalism. But this destruction was so creative, genius may have tipped over into the nearby madness. And slid down a slippery slope into financial criminal insanity.
But on the principal of not bending over to pick up a $100 bill on the sidewalk because, if it really were one, somebody would have picked it up already, we economists will say
if it the hidden information was valuable enough to change somebody’s market behavior, they would have known it somehow, otherwise it wasn’t worth it to find out
and publish a nice mathematical model and run as many regressions as it takes to make it so.
No problem here, move along.
DougJ
Good question. I think the answer is “a fair amount”.
Yutsano
@Steeplejack: The beauty of the Wall Street cahsino (typo to avoid moderation, FYWP) is that what one investment house can do any of the other big fish can step in and perform just as
illegallywell. So the short answer is yes, whether those houses have the long standing business contacts is a totally different matter.EDIT: Or what DougJ said.
@Eljai: I await the inevitable gloating from Matt over being so fucking right. Of course he was being hyperbolic when he made his accusations, but still he was on their case before anyone else was really paying attention.
Eljai
Last summer McMegan accused Matt Taibbi of becoming the “Sarah Palin of journalism” because he wrote a scathing story about Goldman-Sachs. Wonder what she’ll say now. I can’t read her so I’m counting on you, DougJ, to tell me.
jl
@Eljai: McM will say that last half @8 above. Just watch.
Whichever frontpager blockquotes her rationalization in outrage, please e-mail me a beer instead of a ht.
DougJ
Me too. There’s no telling.
Omnes Omnibus
@jl: Ummmm, what about bounded rationality, externalities, market failure, moral hazard, and such? Do economists like you say anything about those?
PeakVT
@Eljai: I
thinkhope the reply will be another winner along the lines of “Technically true, but collectively nonsense.”jl
@Omnes Omnibus: Exxxccuuuuuuuuuusssssssse me. Those complications make the math inelegant and does not admit of solutions that look like what physicists do, therefore all those issues are declared ‘ad hoc’. McM will explain it all to you in intuitive garbeldygook.
Mark S.
She doesn’t mention Taibbi (no surprise), but here are the highlights:
. . .
. . .
. . .
. . .
It’s killing her for some reason. She’s so defensive about this damn bank.
Steve
@Bnut:
Hey look, I agree. I got lots of laughs on Wall Street today when I commented that this news was “like the Bush Administration going after Halliburton.” But the question is, who is the party of Goldman Sachs NOW – and the fact of the administration bringing this case, plus the Republicans trying to block the financial reform bill, puts the Democrats in a pretty good spot to claim the high ground IMO.
Omnes Omnibus
@jl: Well, I am a simple lawyer so the math scares me anyway. I shall await guidance from McMegan.
And, of course, my apologies for the complications.
DougJ
That would have worked, too, though.
rootless-e
@Steve: The republicans are left with their traditional , but but but Senator Byrd was in the Klan argument.
jl
Crazy lefty extremist got the gold
from Digby’s Hullabaloo:
Today’s Miraculous Factoid
by digby
And the quarterly fundraising reports show that the GOP’s top national target, Rep. Alan Grayson from Orlando, who takes no money from lobbyists, banksters or anyone with business before his committees, raised more money– almost entirely from small grassroots donations– than anyone else running for Congress in the United States, his second quarter in a row with over $800,000.
Wow.
Lot’s of other fascinating stuff from Florida in this DWT post.
http://digbysblog.blogspot.com/2010/04/todays-miraculous-factoid.html
Ash Can
@Mark S.:
I bet she has a load of classmates/buddies working there.
tc125231
Time to set up a “national barber”.
jl
@Mark S.: McM’s column is truly funny. She hasn’t formulated a superficially quasi-respectable rationalization yet, so she resorts to the logical calculus of leer and sneer.
fucen tarmal
i think trying painting the gop as the party of wall st, and letting this case coexist in that frame, is the way to go.
the arguments may not be perfect, but lets make the gop make the ya-buts on this one. sometimes, and you have to appreciate the irony, its about what you can sell, not what it is.
tying yourself up trying to make pure arguments has been bruising our asses for too long…..
i’m ready for a food fight.
petorado
This is bank-on-bank violence, so it’s not even clear that the Santellistas will defend Goldman.
Yeah, I get the feeling that The Smartest Guys in the Room aren’t supposed to collude against the other Smartest Guys in the Room like Goldman did. Wall St. is all about hardball, but the understanding is that no one is supposed to torpedo the moveable feast that everyone is dining off of. What happens when the rest of us start realizing that the Wall Street crowd may be shorting our long positions on our 401Ks?
J. Michael Neal
@Mark S.: Actually, McMegan is at least kind of right, at least as presented in those excerpts. (I’m sure as hell not going to try to read her drivel.) Taibbi did go well beyond just claiming that Goldman took the short side of trades they set up with their clients, or even that they misled their clients. He built up a whole superstructure of arguments around that observation that depended upon the conflicts of interest themselves being illegal. They weren’t. Had Goldman disclosed Paulson’s role in structuring the deal, it would have been perfectly legal. Hell, with proper disclosure, I’d have a hard time even calling it immoral. As rootless-e points out, the counterparties acted like morons, and I suspect that full disclosure wouldn’t have prevented making all the trades, though the spread likely wouldn’t have been as good.
Taibbi starts with a perfectly good point, and turns it into something ridiculously out of control, with lots of swearing thrown in. Now, there’s no doubt that in any battle of wits, he’d leave Megan McArdle dead in a ditch somewhere, but that doesn’t mean he’s that goode.
Yutsano
@petorado:
I’d just as soon we all wake the fuck up and realize the 401(k) system is nothing more than an excuse to plunge even more money into the cahsino. There are NO safe bets in a 401(k), zip. zero, nada. Remember how many of us lost a shit ton of value when the bottom dropped out in 2008? If that wasn’t your clarion call to get all your holdings out of anything stock related honestly you deserve to get used by the Goldman Sachs of the world.
SRW1
Goldman Schmucks – isn’t there a clue in the name right there?
J. Michael Neal
@petorado:
I have a feeling that you haven’t spent much time talking to finance people. They are at the absolute pinnacle of hypercompetitiveness. They always and eternally are trying to rip each others faces off. If someone else is stupid, you take them for everything you can.
We once had a debate on the floor about whether or not it is acceptable to hold on to the profit in cases where one of our competitors had obviously just committed a dumb error, such as fat fingering the entry of the global interest rate, or should you agree to bust the trades. The plurality opinion was that it was unethical *not* to keep the profits. The second most popular opinion (which I subscribed to) was that it depended upon which competitor it was. Some of them, who had demonstrated a willingness to reciprocate, you bust the trades if they ask. Others, no. There were a number of our competitors (Wolverine) with whom I wouldn’t have busted a trade if they’d sent booze and hookers to try to convince me.
Yutsano
@J. Michael Neal:
I shall make note of this significant factoid should the need to bribe you come you anytime in the near future.
SRW1
@J. Michael Neal:
There’s a joke which ends up with the line ‘All we’re doing now is haggling over the price”. I have the feeling you’re familiar with the rest of it, because you’re not disputing the substance of the allegation, you’re ‘just haggling over the price’.
J. Michael Neal
@Yutsano: I both agree and disagree. Yeah, you should be confident that someone is shorting anything you’re long. In fact, that’s pretty much true by definition: if you buy something, it necessarily means that someone else sold it. Get used to the fact that there are going to be contrary opinions.
However, that’s not a good reason to abandon stocks. For one thing, if you think that the world of bonds is any different, you’re wrong. If anything, the US Treasuries market is broken even worse right now, thanks to the Chinese flooding it with money. The reason for a 401(k) is that every class of investment that you are actually allowed to invest in in a 401(k) has positive returns over time. 98% of people shouldn’t get into the game of trying to pick stocks. I think that there are ways to beat the market, but they take a lot of studying. Give your money to Vanguard; they are one of the best companies in the world, and care about there customers. Then just rely upon the positive expected returns of investment classes. You’re right that there’s nothing you can do that doesn’t involve risk, but that’s true of sticking your money under a mattress, too.
Yutsano
@J. Michael Neal: I would agree with you if it weren’t for sentiments like this:
I’m not trying to take you out of context since you’re specifically speaking only of floor traders here, but even in Vanguard how far back does this sentiment go? At what point does it become easier to fuck over your client for your own short-term gain? If you can get into the racket of financial advising, you can pretend to be your client’s best friend while you’re robbing them blind with a smile at the same time. I know, I tried it for awhile before I figured out how slimy I would have to be to actually make a decent living. It’s not you, it’s not Vanguard, it’s the whole fucking Wall Street culture that is the problem here. I have no doubt that when the discovery phase goes into place Goldman Sachs will have a lot of fingers in a lot of pies they will have to justify and it will all be public record.
Oh and I don’t disagree with your point on bonds per se, but even if a bond defaults you still have a recourse. A stock goes poof and too bad so sad.
J. Michael Neal
@SRW1: I’m not sure what your point is. I’m not disputing the substance of the allegations that Goldman had a massive conflict of interest. What I am disputing is that that means what Taibbi argues that it means. When it comes right down to it, conflicts of interest are inherent to the basic function of an investment bank. They are, pretty much by definition, trying to get you to buy something that they want to sell. If they thought it was as good a deal as they are trying to tell you it is, they’d keep it. If you aren’t comfortable with that, don’t deal with an investment bank. Which is pretty smart advice for most people, thus the regulations that prevent your average investor from dealing with investment banks.
What happened is that the nature of the investment banking business changed over the last couple of decades. It isn’t because the inherent conflicts of interest changed. It’s because the risk appetites of investment banks changed. For a variety of reasons, they increased drastically. In the past, the primary reason they wanted to sell what they wanted you to buy is because they had no interest in keeping the risk on their books. Their business model was essentially that of market making: buying and selling the exact same things and keeping the spread.
Once they were willing to keep more risk on the books, increasingly the reason why they wanted to make the trade was because they didn’t like that particular risk as much. The thing is, anyone who paid any attention at all knew that this change had occurred. If you were trading over-the-counter derivatives and weren’t paying enough attention to notice that, I don’t have a hell of a lot of sympathy for you, in the same way I don’t have any sympathy left over for the people who got stuck holding multiple houses that they had planned to flip.
The really big problem wasn’t that investment banks had that conflict of interest. It’s that the vast majority of the people within the system completely underpriced risk. There are a lot of regulatory changes we need to make to try to pre3vent future mispricings of risk from breaking down the system, but that was the fundamental issue. The people who priced risk correctly, like Paulson, were very much the exception.
The real story is about 80% idiocy on the part of market participants and 10% conspiracy. The rest of it was a combination of various factors. Taibbi’s arguments rest upon the ratio being reversed. It’s an easy sell on the surface, because that 10% means that a lot of people walked away with a lot of money despite being idiots, but it’s not the fundamental element of the problem.
The reason I think Taibbi is so dangerous is that, in many ways, the way you regulate the market if you want to prevent stupidity from dragging us all down isn’t the same way you regulate it to prevent conspiracy from doing the same thing. I firmly believe that focusing too much on the latter is counterproductive in where we need to go.
J. Michael Neal
@Yutsano:
Pretty much the whole way. Vanguard isn’t a trading company. They don’t have the mentality I described at all, because they don’t think of themselves in that game. They don’t define themselves by making trades. In fact, they try to make as few trades as possible; that’s why their so cheap.
This is related to the fact that, when looking for mutual funds, the single most important piece of information to get isn’t their year-on-year returns. More important than everything else combined is their expense ratio. Not only does a low expense ratio mean that less of that return is getting skimmed off by the mutual fund company, it’s also an indication of their entire business model. If it’s low, it means that there is very little churn. Without that, there’s very little way for someone to take advantage of you.
I do, though, agree that the financial advisory industry is a scam. Don’t use them. Again, that’s not what Vanguard does.
Bonds also default a lot more often than entire companies go bankrupt, too. You may not lose everything, but there is a better chance of losing something than most people realize.
The relevant question that needs to be asked is whether or not your expected returns are high enough to justify the risk that you are taking. Nothing is riskless, so you always have to ask that for everything. If the return on equities is high enough, you accept the added risk.
Now, what is true is that I think the risk premium is in flux these days. By that, I don’t just mean that stocks haven’t returned much over the last decade. It’s that the amount of premium over Treasuries that one can reasonably expect to make by buying equities has probably been shrinking. Trying to explain why gets pretty deep into the weeds, even relative to where I am now, but it’s probably the case. Finance academics are running around in a panic because no one has any idea what it should be. Thus, the old assessments of when one should be in stocks or bonds, and to what extent, are out the window, and no one has the right answer. No one is likely to until we have an extended period of lower volatility. So, I don’t have any advice for anyone on where they should be. All I’m saying is that just getting out means forfeiting all ability to save for the future in any sort of rational way.
SRW1
The real story is about 80% idiocy on the part of market participants and 10% conspiracy. The rest of it was a combination of various factors. Taibbi’s arguments rest upon the ratio being reversed. It’s an easy sell on the surface, because that 10% means that a lot of people walked away with a lot of money despite being idiots, but it’s not the fundamental element of the problem.
See, this is were I disagree with you and agree with Taibbi. There’s what you called ‘conflict of interest’ and then there’s outright fraud. And I think the balance between the two is way more towards the latter than you seem to think. Did you listen to the Magnetar piece on This American Life? If not, give it a go.
Maude
@J. Michael Neal:
Just finished re-reading Liar’s Poker today.
Taibbi it tiring. He read stuff about AIG and then went off on an emotional tangent. He now seems to think of himself as a finacial expert. He’s a celebrity.
When it comes to who is going to lose the money, the bank will try to offload the dead dog on a customer.
J. Michael Neal
@SRW1:
The problem with this argument is that it doesn’t take notice of the people on the other sides of the trades. To really buy into the argument that it’s all fraud, I have to assume that the counterparties are all complete morons. Even if that’s the case, the real problem is the idiocy.
As I said, everyone I talked to knew that the shift had happened. We knew that the risk appetite of investment banks had changed. We knew that Goldman, among lots and lots of others, was out to try to screw us. Aside from the fact that I really don’t think that out-and-out fraud was nearly as prevalent as you do (keeping in mind that a lot of people don’t seem to understand what fraud actually is in any legal sense), this argument relies upon the idea that no one did anything resembling due diligence.
If the counterparties to these kinds of trades were average investors, I’d feel differently, but they aren’t. DougJ correctly described it as bank-on-bank violence. If the counterparties had done their jobs, they wouldn’t have been nearly as easy to take advantage of. I look at this deal, and ask myself, “Did these people never stop to ask themselves why Goldman was putting these deals together?” Someone is only going to structure them if they think that they can make money.
I’m not saying fraud didn’t happen. I’m saying that the fraud wouldn’t have been as destructive if it weren’t for the idiocy. Keep in mind that this was 2007. The people on the other side of these deals had been buying this stuff voraciously for five years at that point. Goldman and Paulson decided to defraud them because they had already demonstrated that they would be easy marks as soon as they tried it, because they had shown that they weren’t discriminating in any way. The idiocy preceded the fraud, and was necessary to the fraud ever coming into existence.
None of this is to say that I disagree with prosecuting the fraud. I’m all for it. But that’s not the real problem. The real problem is that the entire market so misidentified risk that they gobbled it all up. AIG got itself into trouble not because of fraud, but because they thought they’d found a way to make free money, and never stopped to ask *the* most basic question in finance: why is someone letting me make free money? Just like the fact that people do sometimes drop a $20 bill on the floor, arbitrage opportunities really do come into existence. Occasionally. But, like those $20 bills, they disappear really quickly. If it sticks around, it’s not an arbitrage opportunity. If you don’t know who the sucker is at the table, it’s you.
I need to keep repeating: these were not average investors. They were other banks, and hedge funds, and insurance companies, and pension funds, and other institutions where professional people ran things. Throw in the occasional very, very rich person, and that covers all of them. They ought to have known better, but they didn’t.
I remember talking with some of the whiz kids from New York (I worked for Citi out here in Minnesota at the time) after a meeting in which they were describing ways we could use prices of company debt to predict future volatility of the stock. They thought they had the perfect set-up, involving buying up a lot of a company’s debt and hedging it with nickel puts. They were telling us about how it was free money. I sat there, and I couldn’t figure out where the flaw in their plan was, but I knew there had to be one. I still don’t know where that particular flaw was, but it all doesn’t look so good now, does it? These guys didn’t stop to ask that question.
None of the fraud prevention in the world will protect the financial system if we don’t idiot proof the thing. If we do idiot proof it, then, unaddressed, the fraud would be a major problem on the individual level, but wouldn’t be a systemic issue. It’s people being stupid that is both necessary and sufficient to crash everything.
Now, I will admit that there is a serious principal/agent problem involved in the current set up of the banking system. It’s pretty much the same problem that exists inherently in the corporate system of governance in all industries, but the nature of modern finance makes it much worse for these companies. Ideally, I’d like to find a way to make big investment banks go back to being partnerships rather than corporations. That change alone would make me feel a lot more secure. I’m just not sure how to do it.
PeakVT
Speaking of violence, some of the real-world effects of the banksters’ games can be seen here (2nd and 3rd to last graph).
ETA: Good day for viewing volcano pr0n.
J. Michael Neal
@Maude:
I love Liar’s Poker. I didn’t read it until after I’d washed out of the finance industry, but it’s so very true. I’ve interacted with every single character in that book.
Keep in mind that, when I say, “It’s so very true,” I don’t mean that it’s factually accurate. When you read Michael Lewis, you have to be constantly aware that he plays fast and loose with the facts. He embellishes things to make his points, and he *always* goes out of his way to make his sources look good. That said, I almost always (The Blind Side is something of an exception) think that his basic message is correct, and that the story he tells is an important one. He’s also a fantastic writer.
J. Michael Neal
@PeakVT:
Cause and effect get kind of confusing here. I can make as good a case that the ridiculous house prices caused the bankers’ games as the other way around. There was a lot more going on than just insanity on Wall Street, and trying to pin all the blame there is wrong.
Yutsano
@PeakVT: Wow. Gaia is having herself one pretty massive belch there.
Ailuridae
@J. Michael Neal:
We once had a debate on the floor about whether or not it is acceptable to hold on to the profit in cases where one of our competitors had obviously just committed a dumb error, such as fat fingering the entry of the global interest rate, or should you agree to bust the trades. The plurality opinion was that it was unethical not to keep the profits. The second most popular opinion (which I subscribed to) was that it depended upon which competitor it was. Some of them, who had demonstrated a willingness to reciprocate, you bust the trades if they ask. Others, no. There were a number of our competitors (Wolverine) with whom I wouldn’t have busted a trade if they’d sent booze and hookers to try to convince me.
Not disagreeing per se but I know the occupants of two or three pits in Chicago across multiple exchanges and the interactions of those in the pit can much better be described as collegial than competitive. They stand in each other’s weddings, they divide up orders etc.
When I traded I was always on a screen and we didn’t make markets. If I got the best of somebody who made a mammoth mistake at FBCO or GSCO I tended to take it on the nose.
J. Michael Neal
@Ailuridae: I’ll agree that it’s collegial. It’s a very odd mentality, in that you will go to each others weddings on weekends, and try to drive each other into poverty the other five days.
That said, I never worked on an exchange floor, which I seem to have left the impression I did. My trading was all through a screen, too. It was making markets, though. That’s just a whole different level of stress.
SRW1
@J. Michael Neal:
I didn’t say it was ‘all fraud’ my point wast that you and I seem to have different opinions on where the balance between what you called ‘conflict of interest’ and outright fraud lies in these events.
Second point: I wouldn’t care nearly half as much if this would have been merely a case of bank-on-bank violence. Actually, if that would have been all it was, I couldn’t care less. What made it way more than that however, is that the consequences of it almost took the world economy down, massively disrupted the live of millions of people who had no role in these nice little games whatsoever, and drove up public debt in a manner that will continue to have a negative impact on their lives for years, actually decades, to come.
You probably know William Black of ‘The Best Way to Rob a Bank’ fame. He did an interview on the The Real News recently. If you haven’t seen it, Google it and then tell me that we have been concerned enough about the fraud that went on before the 2008 crisis.
PS: The joke I was referring to doesn’t seem to have rang a bell with you. Here it goes:
A young starlet hails a cab at two o’clock in the Morning. On the ride home she complains to the cabbie about the rich idiots she met at this party. Cabbie asks her whether she would have gone home and had sex with one of them if he had offered her a million. To which she replied that well, yeah, she would. When they arrive at her apartment, the cabbie asks her whether she would have sex with him for a hundred bucks.
She replies: “Who do you think I am, a whore?”.
To which he says: “I thought we had already established that, now were just haggling over the price.”
bob h
I still do not understand why Paulsen himself has not been indicted.
I believe, a la “This American Life”, that JPMorgan Chase and hedge fund Magnetar were involved in similar shenanigans, so Jamie Dimon could be getting the comeuppance he deserves soon.
arguingwithsignposts
I still haven’t read the entire thread, but find it interesting that this comes so soon on the heels os this fascinating investigative piece that aired on This American Life last week.
And apparently everyone on wall street knew what was going on.
kay
@J. Michael Neal:
I keep hearing this. This is true, but if people who care about “average investors” entering the market rely on that they’re crazy.
That isn’t how people think, JMN.
They’re going to draw the opposite conclusion.
“If Goldman would rob their largest customers, what are Wall Streeters going to do to me, the little guy?”
“If my pension fund manager got burned, what possible chance do I have?” That’s what they’re going to think.
The people holding the pensions are little guys. They’re going to think Wall Street robbed their money, and that the game is rigged.
They’re going to think these various financial actors are DISHONEST, whether or not it’s illegal. Why would they turn their money over to dishonest people? They won’t. They can’t afford to.
I think the only thing that will mitigate the damage to reputation is, ironically, regulation, a police force, and yet that’s exactly what Wall Streeters are spending hundreds of millions to block.
kay
“Late last year, Mr. Paulson donated $20 million to the Stern School of Business at New York University and $5 million to Southampton Hospital in Long Island’s East End, where he bought a $41 million home in early 2008. He lives with his wife and two daughters on the Upper East Side of Manhattan.
Amid criticism of investment strategies that profited from mortgage defaults, home foreclosures and other miseries, Mr. Paulson has also given $15 million to the Center for Responsible Lending for a center devoted to providing foreclosure assistance to troubled borrowers.
At the time of the donation, Mr. Paulson said of the center and its work, “We are pleased to help them provide legal services to distressed homeowners, many of whom have been victimized by predatory lenders.”
I know I should be endlessly grateful that he gave 15 million to those toiling away, helping individuals find their way out of this mess, but that 41 million for his own home compared with 15 million for legal aid to those “victimized by predatory lenders” just jumped right out at me.
If lobbyists for finance would get the fuck out of the way and allow some consumer protection regulation, homeowners wouldn’t need the robber baron’s charity.
He can keep the 15 million and call off the lobbyists, and we’ll call it even.
kay
This is great. I hope like hell they don’t settle. We really need a trial.
Tourre sent an e-mail message to a friend, referring to himself as fabulous Fab: “The whole building is about to collapse anytime now. … Only potential survivor, the fabulous Fab … standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all the implications of those monstruosities!!!”