Goldman Congressional Hearings

[Illum]

This just in, Fuld, Prince, O'neal and Frank Raines all agreed today Goldman Sachs is not running a business that is in the best interest of America.

Tan man had no comment. He was smoldering at the time.

 

[Bond Trader]

Quote from torontoman:

Did u hear that? "Unfortunate to have on an email."

Unfortunate - because they should have learned from Merrill

 

[pupu]

Hehehe

They sure looks like a bunch of roaches scurrying for cover when the the lights are switched.

 

[asiaprop]

Of course they would have loved to but were strictly briefed by their team of lawyers not to tarnish the firm's reputation. I think anybody who had nothing to lose in this game would have stuck it to those idiots in senate. Its shameless and of the lowest level how they conducted themselves. At the very least a class A circus show, which was so worth it I stayed up all night to watch in the East Asian time zone.

Quote from Mike Morrison:

Too bad none of these GS guys has the balls to stand up and call this BS for what it is.

Afterall there are no bigger piles of shit than the men and women who make up the US Senate unless of course you include Congress. For a bunch of jerks who lie, spin and twist any shred of truth in their effort to get elected or their bills passed it's just ridiculous to see them acting so high and mighty as though they are the pillars of moral and ethical conduct.

In my dreams it goes something like:

McCain: Are you comfortable with selling a security to a client that you have a short position in?

GS: I'm a hell of a lot more comfortable with that than I am with you brow beating your fucking wife thats for sure.

Levin: So you you have no problem with being short a security your selling to a client?

GS: No, but since you asked let me just say I do have a fucking problem with your colleague Senator Rangel and his BS real estate/tax evasion schemes.

Please, someone go postal. Please!

 

[asiaprop]

to correct you (and you may verify my statements in any basic book on structuring rates products), it does not matter what securities you put into the portfolio. The models (yes their assumptions were incorrect, but I just cite how things were done) took care of slicing the risk into different tranches and institutional investors decided which chunk to take onto their books, knowing fully of its risk (at least so they thought). That BBB rated mortgages (to pick up on on example in the hearing) ended up in AAA CDOs has a simple reason and I wonder why none of the traders mentioned it: Its not just the models that pumped out AAA ratings although BBB mortgages went in (thats actually a pretty poor explanation imho), its credit enhancements that were used and other third party guarantees and various technical issues that ensured certain cash flows to be directed to higher rated tranches first before flowing into lower ones. Some blame that rating agencies were "bought" to issue AAA ratings but I think thats too easy an answer to this whole mess. No, rating agencies in my opinion have a larger fault in all this than the ibanks themselves because all the modeling assumptions were completely wrong.

Quote from trendlover:

Mr. Levin made good points to Mr. Blankfein when he tell him if he funded some of the lenders, then buy their bundles of loan, then sell the loans, he must know this lenders make VERY bad loans.(due dilligence?) And then GS sell with the AAA rating to (instituitions that can only invest in the AAA) pensions, endowments...
Look like Mr. Blankfein will blame the sale people.

 

[asiaprop]

and why would you be able to nail GS because they shorted the market or financials or anything? Since when is that illegal? I guess thats where a lot of the anger in public comes from, JEALOUSY: I lost my house, I lost my investment, how come this other guy on the other side of the street was smarter than I was and managed his risk or even profited from the sell-off, he must have done something illegal or he had insider information. As popular as this sentiment is, its wrong!!!

Quote from Cdntrader:

Note to government. If you really want to nail GS find out what their EQUITY shorts were. And also how about the CDS they shorted on financials? not even mentioned. LOL

Man these people are beyond stupid to think they will outsmart GS brains.

 

[asiaprop]

YES, and again yes, and yes!!!

So right on that...

P.S.: Paulson made a bet and he was right, GS was on the same side and they were also right, a lot of guys who shorted a little earlier got their ass handed to them.

Quote from jficquette:

This Telethon today was to influence as many people as possible to support their reform bill that they are trying to push through this week.

What they didn't anticipate though was how utterly incompetent Goldman would make them look. They asked questions they did not understand and got answers they didn't understand. It wasn't Goldman that caused the housing market to collapse. Tons of people saw this coming. We were all talking about it back in 2004.

 

[trendlover]

Quote from asiaprop:

to correct you (and you may verify my statements in any basic book on structuring rates products), it does not matter what securities you put into the portfolio. The models (yes their assumptions were incorrect, but I just cite how things were done) took care of slicing the risk into different tranches and institutional investors decided which chunk to take onto their books, knowing fully of its risk (at least so they thought). That BBB rated mortgages (to pick up on on example in the hearing) ended up in AAA CDOs has a simple reason and I wonder why none of the traders mentioned it: Its not just the models that pumped out AAA ratings although BBB mortgages went in (thats actually a pretty poor explanation imho), its credit enhancements that were used and other third party guarantees and various technical issues that ensured certain cash flows to be directed to higher rated tranches first before flowing into lower ones. Some blame that rating agencies were "bought" to issue AAA ratings but I think thats too easy an answer to this whole mess. No, rating agencies in my opinion have a larger fault in all this than the ibanks themselves because all the modeling assumptions were completely wrong.

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This is what I see. They make the loan to (bad credit) people. Ok, so this should show in the model (high risk) true? BUT they charge the bad credit people very high interest rate. This high interest rate is the calculation to cover default risk in the model. But really everyone know who care if the interest is high, this people can not pay in time. But it the "model" show the better rating (because of high interest rate) to poor people.

 

[rallydog]

Quote from pupu:

Hehehe

They sure looks like a bunch of roaches scurrying for cover when the the lights are switched.

You're referring to the Senators I assume.

 

[ASusilovic]

Quote from asiaprop:

to correct you (and you may verify my statements in any basic book on structuring rates products), it does not matter what securities you put into the portfolio. The models (yes their assumptions were incorrect, but I just cite how things were done) took care of slicing the risk into different tranches and institutional investors decided which chunk to take onto their books, knowing fully of its risk (at least so they thought). That BBB rated mortgages (to pick up on on example in the hearing) ended up in AAA CDOs has a simple reason and I wonder why none of the traders mentioned it: Its not just the models that pumped out AAA ratings although BBB mortgages went in (thats actually a pretty poor explanation imho), its credit enhancements that were used and other third party guarantees and various technical issues that ensured certain cash flows to be directed to higher rated tranches first before flowing into lower ones. Some blame that rating agencies were "bought" to issue AAA ratings but I think thats too easy an answer to this whole mess. No, rating agencies in my opinion have a larger fault in all this than the ibanks themselves because all the modeling assumptions were completely wrong.

Nevertheless, it's very "unfortuante" to describe these securities in emails as "sh.tty"... That's what this hearing was all about : to make GoldMAN look sh.tty.