Rumor on the block is that there are some errors popping up in the comments. I honestly have no idea what the problem is, but will look into it.
John Cole started Balloon Juice early in 2002. Those who have followed along know that this has been quite the journey.
They’re Also Against Aids, Cancer, and Heart Attacks
A bold statement from Lloyd Bankfein:
This is Lloyd on Sunday in New York. Following my message to you on Friday, I wanted to update all of you and let you know that we have been taking all appropriate steps to defend the firm and its reputation. As we prepare for the opening of markets around the world, I want to remind all of you of the fundamental values that have served Goldman Sachs throughout our history: teamwork, excellence, and service to our clients. The extensive media coverage on the SEC’s complaint is certainly uncomfortable, but given the anger directed at financial services, not completely surprising. Still, it is important to put the SEC’s action in context. The core of the SEC’s case is the allegation that one employee misled two professional investors by failing to disclose the role of another market participant in a transaction. Importantly, we had assumed risk in the deal and we lost money, just like the other two long investors. I will repeat what you have heard me say many times in the past: Goldman Sachs has never condoned and would never condone inappropriate activity by any of our people.
So the three-pronged defense from Goldman is:
1.) We didn’t do anything wrong
2.) If we did do anything wrong, it was just a few bad apples
3.) We’re against wrong, as I’ve said lots of times!
Good luck with that, Lloyd!
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Open Thread
I’m in a pissy mood.
Living Large
Lifestyles of the rich and infamous
As if to put the icing on the cake, the investment bank Goldman Sachs is set to shell out another $5 billion in bonuses to employees.
What’s more, the bonuses are expected to cover the employees’ work for just the first three months of the year, according to the UK Sunday Times.
According to the report, bankers will receive remuneration of about $170,000 per person for the firm’s 32,500 employees. Some traders are set to receive millions.
Earlier this year, Goldman’s “junior” bankers were told they’d begin receiving salaries that were double their previous takes.
“It’s made me rethink everything,” a Goldman Sachs employee, “sipping champagne,” told the site. “I like the new structure even better. My monthly take home just went way up.”
I’m to the point now that every time I think of Goldman Sachs employees, I think of the dinner scenes at restaurants in the Sopranos or Goodfellas.
Obviously, This Is What Comes To Mind When I Think of Jesus
Nice to see what our “Christians” are up to these days:
The U.S. Supreme Court hears arguments Monday in a major case testing whether state colleges and universities can deny official status and subsidies to student groups that bar homosexuals and other groups from membership. The case could affect public colleges and universities across the country, and it puts the court in the middle of a long struggle by Christian activists who contend that their rights are violated on campus by secular rules.
Hastings College of the Law in San Francisco has for 20 years had what it calls an all-comers policy. Any student group is entitled to official school recognition, as long as the group accepts all comers. Official recognition entitles the group to a small subsidy, preferred use of campus facilities, use of all campus bulletin boards and e-mails and use of the school logo.
he Christian Legal Society has long had a Hastings chapter that was recognized as a registered student organization, but in 2004, the group affiliated with the national Christian Legal Society and changed its policy to exclude from membership homosexuals and those who advocate or participate in pre-marital sex.
“When we did that, the director of student services said that the statement of faith in our bylaws violated their rules against discrimination on the basis of religion and sexual orientation,” says Isaac Fong, a former chairman of the campus Christian Legal Society.
“In practice, this meant that CLS was rendered invisible on campus,” Fong adds. “CLS was denied the ability to communicate with students or to have a physical presence on campus, and that caused the members of CLS to diminish to the point that there are only a few students left now.”
Basically, what they are asking for is a set of special rights that allows them to be bigots, and subsidized ones at that, as they want the right to suck at the university teat and ignore the all comers rule. Because having to abide by the same rules everyone else does, of course, would be an infringement of their religious freedom!
And people wonder why I have no use whatsoever for religion.
Obviously, This Is What Comes To Mind When I Think of JesusPost + Comments (147)
Wall Street Cosplay
Good article in the Times about how everything went to the top at Goldman that had these paragraphs:
One camp of traders was insisting that the American housing market was safe. Another thought it was poised for collapse.
Among those who saw disaster looming were an effusive young Frenchman, Fabrice P. Tourre, and his quiet colleague, Jonathan M. Egol, the mastermind behind a series of mortgage deals known as the Abacus investments.
Their elite mortgage unit is now at the center of allegations that Goldman and Mr. Tourre, 31, defrauded investors with one of those complex deals.
Correct me if I am wrong, but wasn’t the mortgage unit that Joseph Cassano ran at AIG Financial Products also considered “elite?” At any rate, Goldman’s “elite” mortgage unit with the “Fabulous Fab” was smart enough to see what was going to happen! They were like investment commandos! They had the BALLS to make the wild trades that others are too much of a pussy to make! They throw their double-foam latte in the faces of their aides when it isn’t perfect, and they’re not afraid to return a martini four times until it is just right.
But what is so elite about seeing the mortgage collapse coming in 2006? Kevin Drum, now at Mother Jones., was blogging at Calpundit before he went to the Washington Monthly, and he was talking about the housing bubble as far back as 2004 and maybe even earlier. He had so many posts about it from 2006-2007 at WaMo that he was apologizing to his readers for talking about it so much.
But back to what set me off- the notion that there are “elite” units within Goldman and in finance. It just reminds me so much of the behind the scenes stories of the guys at Enron, as detailed in the The Smartest Guys in the Room, how Skilling would lead these exotic trips that everyone had to attend- motocross trips, skiing, skydiving, extreme hiking, and they were forced to go so they could all compare penis sizes. These were adventurers! They are the elites of the elite! They were manly men (watch the whole thing, but start at around 3:02 for the relevant portion):
We see the same sort of nonsense in the Republican party with all the keyboard commandos like Peter Wehner telling us that we have to remain firm, and we have to FIGHT! We see it in the ridiculous military looking patches for the “Red State Strike Force” and other silly things like that. And, of course, Glenn Greenwald wrote an entire book about this nonsense.
Sure, greed played a role in all this, but it really is becoming abundantly clear that our nation is being run into the ground by a bunch of “elites” who are having their revenge on the rest of us because they couldn’t get laid and were given too many wedgies in High School. And we’re literally paying for their revenge.
I used to think American Psycho was a work of fiction.
Tightening Their Own Noose
- And when you lose control, you’ll reap the harvest you have sown.
And as the fear grows, the bad blood slows and turns to stone.
And it’s too late to lose the weight you used to need to throw
around.
So have a good drown, as you go down, all alone,
Dragged down by the stone.
Pink Floyd- Dogs
Via Barry Ritholtz, this bit by Sam Antar about how Goldman’s reaction to the SEC complaint filed Friday may have made their situation worse is a pretty interesting read. I won’t be the only one who would be thrilled if their ginormous egos and their feelings of invincibility caused them to react rashly and hurt themselves even more.
As a side note, I found it pretty interesting that Antar is a convicted felon and has managed to turn that into a marketing scheme in and of itself. He discloses that at the end of this post, on his about page, and clearly uses it to give himself street cred for his new job- teaching people how to catch folks like himself, which reminded me of this post I read the other day at the Epicurean Dealmaker:
Now Dick Fuld, at least in his prime, was a forceful and scary man. It takes a certain kind of personality to tell such a man to go fuck himself to his face. Fortunately, we just happen to have a substantial supply of brass-balled, take-no-prisoners, kill-’em-all-and-let-God-sort-’em-out people ready to hand. By happy coincidence, these individuals also happen to be intimately familiar with the ins and outs of the global financial system, the nature and construction of the myriad securities and engineered products polluting financial markets, and the numberless tricks and stratagems large financial institutions use to end-run rules and regulations designed to keep them in check.
These people are called investment bankers.
That’s right, boys and girls: It’s time for the chickens to band together and hire themselves some foxes to guard the chicken coop.
***The answer, of course, is obvious, if politically difficult to put into effect. Staff the SEC, or whatever “Super Regulator” the government decides to deputize to oversee this mess, with a bunch of highly-paid, tough-as-nails, sonofabitch investment bankers. You will have to pay them millions, just like regular bankers. (You can tie their incentive pay to improvements in the value of securities held under TARP and TALF, if you like.) Pay them well, and investment bankers won’t be able to treat them like second-class citizens at the negotiating table. Pay them like bankers, and your regulators won’t hesitate to read Jamie Dimon or Lloyd Blankfein the riot act, because they won’t give a shit about getting a job from them later.
Trust me, these are the kind of people you will need on your team: highly educated, financially sophisticated, psychotically hard-working, experienced professionals who know or can figure out CDOs, SIVs, balance sheet leverage, and credit default derivatives just as easily as the idiots who created and trade this shit. Leading your enforcement and supervision teams you need a bunch of smooth, smart, plausible, grandiosely self-confident senior bankers who will not hesitate to tell Vikram Pandit to go fuck himself, his mother, and the cow she rode in on if he ever tries to fuck with the United States government, the US taxpayer, or the pizza delivery boy again. You know: psychopaths.
This is not a new idea. For yonks, the Brits have known that the best person to hire as gamekeeper on your ancestral estate is a former poacher, someone who knows what they know, how they think, and where to punch them in the genitals to get maximum negotiating effect.
Not all folks that get caught up in wrongdoing are as willing to turn to the other side- Henry Blodgett has spent the last three days at Clusterstock furiously spinning for Goldman. My favorite line from Henry- that Goldman will get off because they were only screwing savvy investors (Hey- they only robbed the smart and rich folks!).
Personally, I’d give Elliot Spitzer a billion dollars to fund the staff he wants along with the jurisdiction he needs, a box of condoms and permanent immunity for any future callgirl scandals, and then unleash the mean bastard on Wall Street.