Saturday, December 26, 2009

Vampire Squid Smacked Again

"One of the biggest disconnects on Wall Street today is between the way Goldman Sachs [GSG] sees itself (they're the smartest) and the way everyone else sees [GSG] (they're the smartest, greediest, and most dangerous). ... And Buffett has said that while no one could ever understand the balance sheet of any Wall Street firm, he has confidence that [Lloyd] Blankfein is both very smart and very conservative. But there was another reason he invested: 'If I didn't think the government was going to act, I would not be doing anything this week,' he explained to CNBC's Becky Quick. 'I might be trying to undo things this week.' ... Widespread rage. 'Complete crap,' says a former [GSG] managing director. Even Neel Kashkari, a former [GSG] banker, who became assistant secretary of the Treasury last summer, told the [NYT] that 'every single Wall Street firm, despite their protest today, every single one benefited from our actions. And when they get up and say, "Well we didn't need it" that's bull.' ... Despite the public financial statements that [GSG] files evey quarter, no outsider can tell how the firm really makes its money. ... In the aftermath of the crisis, criticism erupted that [GSG] had continued to sell mortgage-backed securities to its clients while betting against those very sercurities for its own account. ... But a less generous interpretation was given in a recent McClatchy Newspapers series, which quotes an analyst report that describes [GSG] as being 'solely interested in pushing its dirty inventory onto unsuspecting and obviously gullible investors.' ... When I ask Gary Cohn is he was worried about [GSG's] stock price, which plunged from $207.78 in Ferburary 2008 to $47.41 in November, he says, 'It wasn't scary at all.' 'Complete and utter nonsense,' says someone who knows Cohn well. ... For all [GSG's] tough talk, when the market made a judgment on [GSG] itself, the firm blinked. ... A memo written by Joseph Cassano, the former head of the AIG financial-products division, shows that some of the securities [GSG] insured with AIG were created by none other than [GSG] itself", my emphasis, Bethany McLean at Vanity Fair, January 2010: http://www.vanityfair.com/business/features/2010/01/goldman-sachs-200101?printable=true.

PriceWaterhouseCoopers (PWC), did you read this? Preet Bharara, did you read this? Where are some indictments of Vampire Squid executives for securities fraud? Like Alice in Wonderland, "stuff and nonsense", Cohn.

6 comments:

Anonymous said...

Sure... from the VF article (good one for a glossy)...

...describes Goldman as being “solely interested in pushing its dirty inventory onto unsuspecting and obviously gullible investors.” (A Goldman spokesperson says, “The statement is not true. The McClatchy series was characterized by unsubstantiated claims, innuendo, and outright falsehoods.” McClatchy, however, stands by its work.)

Everyone on the Street has a story of a Goldman salesman pushing crap onto them... and some lost their job when their firm had to eat the loss.

AIG is just that strategy writ large... dump the crap on the taxpayers and have them eat the losses.

Bad move Lord Blankfein. Very bad move... but then I guess it was the only move you really know. Hyper aggression trading strategy. Move that junk OUT of the trading book. Look for the dumbest "counterparty".

The Financial Times might call you "Man of the Year" but they celebrate that kind of nonsense...

When is Joseph Cassano going to start singing? Doesn't he have a song about trying to negotiate hair cuts on collateral with Goldman over the dodgy CDOs???

Independent Accountant said...

Anonymous:
Cassano hasn't said anything and is not likely to. Cassano knows unless he keeps his mouth shut, the Vampire Squid-controlled SDNY US attorney's office (SDNY-USAO) will indict him for something. For all we know, the SDNY-USAO handed Cassano a 150-count indictment and told him, "shut up or else we'll take this to the grand jury". Unless Cassano can pull a "Blogo", he should shut up. Cassano may even live to a ripe old age. As a "free" man.

IA

Svend said...

IA, do you really think that is how it goes? To speak against VS will bring the state against you? I know they're all captured, but you're suggesting a level of corruption similar to Russia or Cambodia.

Thanks for all your work on this site. I learn lots. Cheers.

Independent Accountant said...

Svend:
That is exactly how I feel. Our justice system is little if any better than China's or Russia's; Cambodia's probably. I conclude the most corrupt prosecutorial agency in the US is the SDNY US attorney's office. Again and again I question the cases it brings and more importantly those it fails to bring. I first questioned it during 1994's Joe Jett fiasco. Since then its gotten worse every year. Where did our "ping pong ball fed" Mary Jo White come from? With thousands of federal criminal charges, the DOJ can usually make a case against anyone its wants. Read some Harvey Silverglate stuff for example. Look at Citigroup's Craig Gile. Why were the Bear Stearns Two or Martha Stewart prosecuted? I could go on and on. Why has no one at Vampire Squid gone over for securities fraud? It's bad out there and getting worse.

IA

Svend said...

Well, that's not good. I do agree with you, but my lingering attachment to the US as an idea sometimes prevents rational thinking. So it goes.

Have you seen The Wire? Ok, it's a leftist fantasy of the ghetto, but there was a great line:

"We used to make things in this country. Now, we just put our hands in the pocket of the next guy."

Ain't it true. What a sad completion to what was a nation with great potential.

Independent Accountant said...

Svend:
If you haven't, read my posts on "Goldman's Schtarkes" like my 12 September 2009: http://skepticaltexascpa.blogspot.com/2009/09/goldmans-schtarkes-4.html. Look at the SDNY's actions here.

IA