Day after day, bankers have been paraded before Congressional committees regarding their role in the financial crisis which brought the financial system to the edge of the abyss on September 18,2008. Every one has claimed that they were not responsible in any way for the disaster. They blame once in a lifetime circumstances that no one could have anticipated. It was a perfect storm and they had no way of knowing. These Harvard MBA Wall Street geniuses, who collected compensation in excess of $100 million each before the collapse, had no idea what was going on within their own firms. Ignorance and stupidity is no excuse for losing a trillion dollars. The truth is that the CEO’s of all the Wall Street banks encouraged a casino culture of greed and gambling. The generation of fees became the sole driving incentive for every firm. It started with collateralizing subprime mortgages into packages of mortgage backed securities. Then they created Credit Default Swaps as insurance on these mortgages. When they ran out of chumps to put into houses, they created side bets with Credit Default Obligations that didn’t require an actual homeowner.
The fees generated by creating this crap were incomprehensible. The Masters of the Universe were taking home pay packages of $25 million and weren’t satisfied. They only made one small mistake. They deluded themselves into thinking the crap they were selling to suckers wasn’t actually crap. They ended up buying their own toxic paper. Even though they knew that the ratings agencies were basically whoring out AAA ratings for fees, they believed that AAA rated securities they were buying and insuring weren’t actually worthless. They didn’t understand that they had created Frankenderivatives. Author Michael Lewis has done a fantastic job making this sordid tale of greed understandable to the common person.
You are probably thinking that the title of this article is strange, but you will understand in a few minutes. Michael Lewis wrote the classic Wall Street book about the greed of the 1980′s Liar’s Poker, published in 1989. He detailed the absurdity and greed of Wall Street from his firsthand experiences working at Salomon Brothers fresh out of college. He captured the destructive culture of Wall Street in a very funny 290 page classic. He immortalized the term Big Swinging Dick regarding Salomon (“If he could make millions of dollars come out of those phones, he became that most revered of all species: a Big Swinging Dick.”). He also described the act of Blowing up a customer -Successfully convincing a customer to purchase an investment product which ends up declining rapidly in value, forcing the client to withdraw from the market.
He described an old mortgage bond trader named Donnie Green who once stopped a young callow salesman on his way out the door to catch a flight from New York to Chicago. Green tossed the salesman a ten dollar bill. “Hey, take out some crash insurance for yourself in my name”, he said. “Why?” asked the salesman. “I feel lucky,” said Green. Some other memorable snippets included:
- The larger the number of people involved, the easier it was for them to delude themselves that what they were doing must be smart. The first thing you learn on the trading floor is that when large numbers of people are after the same commodity, be it a stock, a bond, or a job, the commodity quickly becomes overvalued.
- In any market, as in any poker game, there is a fool. The astute investor Warren Buffet is fond of saying that any player unaware of the fool in the market probably is the fool in the market.
- The firm’s management created a training programme, filled it to the brim, then walked away. In the ensuing anarchy the bad drove out the good, the big drove out the small, and the brawn drove out the brains.
- Whenever calculus is brought in, or higher algebra, you could take it as a warning signal that the operator was trying to substitute theory for experience.
- The only thing that history teaches us, a wise man once said, is that history doesn’t teach us anything.
- That was how a Salomon bond trader thought: he forgot whatever it was that he wanted to do for a minute and put his finger on the pulse of the market. If the market felt fidgety, if people were scared or desperate, he herded them like sheep into a corner, then made them pay for their uncertainty. He sat on the market until it puked gold coins. Then he worried about what he wanted to do.
- Stupid customers (the fools in the market) were a wonderful asset, but at some level of ignorance they became a liability – they went broke.
Michael expected that his book would convince many smart college students to pass on Wall Street and pursue worthwhile careers. Instead he was bombarded with fan mail thanking him for making Wall Street seem so appealing. The unquenchable desire for millions in compensation and unfettered greed on Wall Street only grew during the two decades since his book.
He has now book-ended two decades of greed with his latest masterpiece The Big Short: Inside the Doomsday Machine. He was able to link the two books by interviewing John Gutfreund, his former boss at Salomon Brothers, at the end of his new book. Lewis is able to explain the most recent financial crisis caused by Wall Street through the eyes of a few oddball skeptics. It is a truly enlightening book and reveals the true nature of the Wall Street mega-banks. Lewis summarizes the big picture in the following sequence:
By early 2005, the sub-prime mortgage machine was up and running again. If the first act of sub-prime lending had been freaky, this second act was terrifying. $30bn was a big year for sub-prime lending in the mid-1990s. In 2005 there would be $625bn in sub-prime mortgage loans, $507bn of which found its way into mortgage bonds. Even more shocking was that the terms of the loans were changing in ways that increased the likelihood they would go bad. Back in 1996, 65% of sub-prime loans had been fixed-rate. By 2005, 75% were some form of floating rate, usually fixed for the first two years.
By the time Greg Lippmann, the head sub-prime guy at Deutsche Bank, turned up in the FrontPoint conference room, in February 2006, Steve Eisman knew enough about the bond market to be wary. Lippmann’s aim was to sell Eisman on what he claimed was his own original brilliant idea for betting against – or short selling – the sub-prime mortgage bond market.
Eisman didn’t understand. Lippmann wasn’t even a bond salesman; he was a bond trader: “In my entire life, I never saw a sell-side guy come in and say, ‘Short my market.’” But Lippmann made his case with a long and involved presentation: over the last three years, housing prices had risen far more rapidly than they had over the previous 30; they had not yet fallen but they had ceased to rise; even so, the loans against them were now going sour in their first year at amazing rates.
He showed Eisman this little chart that illustrated an astonishing fact: since 2000, people whose homes had risen in value between 1% and 5% were nearly four times more likely to default on their home loans than people whose homes had risen in value more than 10%. Millions of Americans had no ability to repay their mortgages unless their houses rose dramatically in value, which enabled them to borrow even more. That was the pitch in a nutshell: home prices didn’t even need to fall; they merely needed to stop rising at the unprecedented rates they had been for vast numbers of Americans to default on their home loans.
Lippmann’s presentation was just a fancy way to describe the idea of betting against US home loans: buying credit default swaps on the crappiest sub-prime mortgage bonds. The beauty of the credit default swap, or CDS, was that it solved the timing problem. Eisman no longer needed to guess exactly when the sub-prime mortgage market would crash. It also allowed him to make the bet without laying down cash up front, and put him in a position to win many times the sums he could possibly lose. Worst case: insolvent Americans somehow paid off their sub-prime mortgage loans, and you were stuck paying an insurance premium of roughly 2% a year for as long as six years – the longest expected life span of the putatively 30-year loans.
Eisman could imagine very little that would give him so much pleasure as going to bed each night, possibly for the next six years, knowing he was shorting a financial market he’d come to know and despise, and was certain would one day explode.
In the summer of 2006, house prices peaked and began to fall. For the entire year they would fall, nationally, by 2%. By that autumn, Lippmann had made his case to hundreds more investors. Yet only 100 or so dabbled in the new market for credit default swaps on sub-prime mortgage bonds. A smaller number of people still – more than 10, fewer than 20 – made a straightforward bet against the entire multi-trillion-dollar sub-prime mortgage market and, by extension, the global financial system. The catastrophe was foreseeable, yet only a handful noticed.
Eisman was odd in his conviction that the leveraging of middle-class America was a corrupt and corrupting event. At the annual sub-prime conference that year, Eisman walked around the Venetian hotel in Las Vegas – with its penny slots and cash machines that spat out $100 bills – and felt depressed. It was overrun by thousands of white men now earning their living, one way or another, off sub-prime mortgages.
Later, whenever Eisman set out to explain to others the origins of the financial crisis, he would start with what he learned in Las Vegas. He’d draw a picture of several towers of debt. The first tower was the original sub-prime loans that had been piled together. At the top of this tower was the safest triple-A rated tranche, just below it the double-A tranche, and so on down to the riskiest, triple-B tranche – the bonds Eisman had bet against. The Wall Street firms had taken these triple-B tranches – the worst of the worst – to build yet another tower of bonds: a collateralised debt obligation. Like the credit default swap, the CDO had been invented to redistribute the risk of corporate and government bond defaults, and was now being rejigged to disguise the risk of sub-prime mortgage loans.
It was in Vegas that Eisman finally understood the madness of the machine. He’d been making these side bets with major investment banks on the fate of the triple-B tranche of sub-prime mortgage-backed bonds without fully understanding why those firms were so eager to accept them. Now he got it: the credit default swaps, filtered through the CDOs, were being used to replicate bonds backed by actual home loans. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. Wall Street needed his bets in order to synthesise more of them. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses in the financial system are so much greater than just the sub-prime loans. That’s when I realised they needed us to keep the machine running. I was like, This is allowed?”
It was in Las Vegas that Eisman and his associates’ attitude toward the US bond market hardened into something like its final shape. The question lingering at the back of their minds ceased to be, do these bond market people know something we do not? It was replaced by, do they deserve merely to be fired, or should they be put in jail? Are they delusional, or do they know what they’re doing?
On the surface, these big Wall Street firms appeared robust; below the surface, Eisman was beginning to think, their problems might not be confined to a potential loss of revenue. He’d go to meetings with Wall Street CEOs and ask them the most basic questions: “They didn’t know their own balance sheets.”
I now have a new hero to worship. His name is Steve Eisman. He is a total prick. Whenever he opens his mouth in public, his two associates – Vincent Daniel and Danny Moses, sink down in their seats in anticipation of him saying something truly outrageous and true. In this book Lewis details how a few skeptical oddball guys figured out that the subprime mortgage market was the scam of the century and tried desperately to call attention to what was happening. The fact that they got unbelievably rich in the process is really secondary to the story of corruption, greed and stupidity by Wall Street bankers, the ratings agencies Moodys and S&P, the SEC, and the American homeowners.
The subprime mortgage market was miniscule during the 1990′s. Steve Eisman, Michael Burry, and 3 guys named Charlie Ledley, Jamie Mai, and Ben Hockett operating out of a garage with $1 million, figured out independently from each other that as the 2000′s progressed an immense bubble of bad debt was being created. The question was how could they take advantage of their discovery.
Eisman had a disdain for the companies in the subprime mortgage industry because he knew they were taking advantage of ignorant poor people. Household Finance was peddling these misleading loans and the CEO sold out to HSBC before the disaster struck. Eisman said, “It was engaged in blatant fraud. They should have taken the CEO out and hung him up by his fucking testicles. Instead they sold the company and the CEO made a hundred million dollars.” After this he made it his life’s mission to expose the fraud in this market.
Vinny Daniel was Eisman’s analyst and Danny Moses was his trader. Vinny was from Queens and trusted no one. Eisman described him as “Very dark.” He dug into the transaction details and fed the info to Steve. Danny didn’t trust anyone on Wall Street.
When a Wall Street firm helped him to get into a trade that seemed perfect in every way, he asked the salesman, “I appreciate this, but I just want to know one thing: How are you going to fuck me?”
Heh-heh-heh, c’mon, we’d never do that, the trader started to say, but Danny, though perfectly polite, was insistent. “We both know that unadulterated good things like this trade don’t just happen between little hedge funds and big Wall Street firms. I’ll do it, but only after you explain to me how you are going to fuck me.” And the salesman explained how he was going to fuck him. And Danny did the trade.
Eisman and his colleagues did real due diligence on the market. They flew around the country, attended subprime conferences and grilled CEOs and the ratings agencies. Lewis detailed these efforts in the book:
Moses actually flew down to Miami and wandered around neighborhoods built with subprime loans to see how bad things were. “He’d call me and say, ‘Oh my God, this is a calamity here,’ ” recalls Eisman. All that was required for the BBB bonds to go to zero was for the default rate on the underlying loans to reach 14 percent. Eisman thought that, in certain sections of the country, it would go far, far higher.
The funny thing, looking back on it, is how long it took for even someone who predicted the disaster to grasp its root causes. They were learning about this on the fly, shorting the bonds and then trying to figure out what they had done. Eisman knew subprime lenders could be scumbags. What he underestimated was the total unabashed complicity of the upper class of American capitalism. For instance, he knew that the big Wall Street investment banks took huge piles of loans that in and of themselves might be rated BBB, threw them into a trust, carved the trust into tranches, and wound up with 60 percent of the new total being rated AAA.
But he couldn’t figure out exactly how the rating agencies justified turning BBB loans into AAA-rated bonds. “I didn’t understand how they were turning all this garbage into gold,” he says. He brought some of the bond people from Goldman Sachs, Lehman Brothers, and UBS over for a visit. “We always asked the same question,” says Eisman. “Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.” He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number. “They were just assuming home prices would keep going up,” Eisman says.
As an investor, Eisman was allowed on the quarterly conference calls held by Moody’s but not allowed to ask questions. The people at Moody’s were polite about their brush-off, however. The C.E.O. even invited Eisman and his team to his office for a visit in June 2007. By then, Eisman was so certain that the world had been turned upside down that he just assumed this guy must know it too. “But we’re sitting there,” Daniel recalls, “and he says to us, like he actually means it, ‘I truly believe that our rating will prove accurate.’ And Steve shoots up in his chair and asks, ‘What did you just say?’ as if the guy had just uttered the most preposterous statement in the history of finance. He repeated it. And Eisman just laughed at him.”
“With all due respect, sir,” Daniel told the C.E.O. deferentially as they left the meeting, “you’re delusional.”
This wasn’t Fitch or even S&P. This was Moody’s, the aristocrats of the rating business, 20 percent owned by Warren Buffett. And the company’s C.E.O. was being told he was either a fool or a crook by one Vincent Daniel, from Queens.
Eisman, Daniel, and Moses then flew out to Las Vegas for an even bigger subprime conference. By now, Eisman knew everything he needed to know about the quality of the loans being made. He still didn’t fully understand how the apparatus worked, but he knew that Wall Street had built a doomsday machine. He was at once opportunistic and outraged.
Their first stop was a speech given by the C.E.O. of Option One, the mortgage originator owned by H&R Block. When the guy got to the part of his speech about Option One’s subprime-loan portfolio, he claimed to be expecting a modest default rate of 5 percent. Eisman raised his hand. Moses and Daniel sank into their chairs. “It wasn’t a Q&A,” says Moses. “The guy was giving a speech. He sees Steve’s hand and says, ‘Yes?’”
“Would you say that 5 percent is a probability or a possibility?” Eisman asked.
A probability, said the C.E.O., and he continued his speech.
Eisman had his hand up in the air again, waving it around. Oh, no, Moses thought. “The one thing Steve always says,” Daniel explains, “is you must assume they are lying to you. They will always lie to you.” Moses and Daniel both knew what Eisman thought of these subprime lenders but didn’t see the need for him to express it here in this manner. For Eisman wasn’t raising his hand to ask a question. He had his thumb and index finger in a big circle. He was using his fingers to speak on his behalf. Zero! they said.
“Yes?” the C.E.O. said, obviously irritated. “Is that another question?”
“No,” said Eisman. “It’s a zero. There is zero probability that your default rate will be 5 percent.” The losses on subprime loans would be much, much greater. Before the guy could reply, Eisman’s cell phone rang. Instead of shutting it off, Eisman reached into his pocket and answered it. “Excuse me,” he said, standing up. “But I need to take this call.” And with that, he walked out.
His dinner companion in Las Vegas ran a fund of about $15 billion and managed C.D.O.’s backed by the BBB tranche of a mortgage bond, or as Eisman puts it, “the equivalent of three levels of dog shit lower than the original bonds.”
FrontPoint had spent a lot of time digging around in the dog shit and knew that the default rates were already sufficient to wipe out this guy’s entire portfolio. “God, you must be having a hard time,” Eisman told his dinner companion.
“No,” the guy said, “I’ve sold everything out.”
Whatever rising anger Eisman felt was offset by the man’s genial disposition. Not only did he not mind that Eisman took a dim view of his C.D.O.’s; he saw it as a basis for friendship. “Then he said something that blew my mind,” Eisman tells me. “He says, ‘I love guys like you who short my market. Without you, I don’t have anything to buy.’ ”
That’s when Eisman finally got it. Here he’d been making these side bets with Goldman Sachs and Deutsche Bank on the fate of the BBB tranche without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?”
Steve Eisman had virtually no respect for the large Wall Street firms, particularly Merrill Lynch. His speech below is reminiscent of Tom Joad’s memorable “I’ll be there” dialogue in The Grapes of Wrath:
“We have a simple thesis,” Eisman explained. “There is going to be a calamity, and whenever there is a calamity, Merrill is there.” When it came time to bankrupt Orange County with bad advice, Merrill was there. When the internet went bust, Merrill was there. Way back in the 1980s, when the first bond trader was let off his leash and lost hundreds of millions of dollars, Merrill was there to take the hit. That was Eisman’s logic—the logic of Wall Street’s pecking order. Goldman Sachs was the big kid who ran the games in this neighborhood. Merrill Lynch was the little fat kid assigned the least pleasant roles, just happy to be a part of things. The game, as Eisman saw it, was Crack the Whip. He assumed Merrill Lynch had taken its assigned place at the end of the chain.
As the financial system crashed on September 18, 2008 and the protagonists of the story became rich beyond all belief, there was no joy. They weren’t happy that they had been proven right. They were disgusted by the entire Wall Street culture. Michael Burry shut down his fund in disgust with his ungrateful investors. The system broke and the Wall Street gamblers should have paid the consequences. Instead, the US taxpayer bailed them out. In the twenty years since Lewis had written Liar’s Poker, Wall Street became greedier, nastier, more corrupt, more arrogant and more incompetent. He traced the biggest financial disaster in history back to his old boss John Gutfreund. His decision to convert Salomon Brothers from a private partnership to a public corporation opened Pandora’s Box. The other Wall Street partnerships followed like lemmings. The risk of failure was shifted from the partners to the shareholders and the citizens of the United States. Lewis details this fateful decision:
From that moment, though, the Wall Street firm became a black box. The shareholders who financed the risks had no real understanding of what the risk takers were doing, and as the risk-taking grew ever more complex, their understanding diminished. The moment Salomon Brothers demonstrated the potential gains to be had by the investment bank as public corporation, the psychological foundations of Wall Street shifted from trust to blind faith.
No investment bank owned by its employees would have levered itself 35 to 1 or bought and held $50 billion in mezzanine C.D.O.’s. I doubt any partnership would have sought to game the rating agencies or leap into bed with loan sharks or even allow mezzanine C.D.O.’s to be sold to its customers. The hoped-for short-term gain would not have justified the long-term hit.
This decision unhinged the concept of risk from the concept of return. Compensation was no longer tied to long term profits and success. Clients were no longer the customer. They were just fee generating suckers. Wall Street kept all the profits, took ungodly risks, lost trillions and got bailed out by Main Street. The poker game continues, as these criminals are again paying themselves billions in bonuses at the expense of Main Street. Michael Lewis completes the 20 year circle of greed with his brilliant book:
“The people in a position to resolve the financial crisis were, of course, the very same people who had failed to foresee it. All shared a distinction: they had proven far less capable of grasping basic truths in the heart of the U.S. financial system than a one-eyed money manager with Asperger’s syndrome. … The world’s most powerful and most highly paid financiers had been entirely discredited; without government intervention every single one of them would have lost his job; and yet these same financiers were using the government to enrich themselves.”
CAST OF CHARACTERS
STEVE EISMAN – Manager of FrontPoint Financial Services hedge fund, which was owned by Morgan Stanley. During the financial crisis he wished he could have shorted Morgan Stanley. “Even on Wall Street people think he’s rude and obnoxious and aggressive,” says Eisman’s wife. “He has no interest in manners. He’s not tactically rude. He’s sincerely rude. He knows everyone thinks of him as a character but he doesn’t think of himself that way. Steven lives inside his head.” The upper classes in this country raped this country. You fucked people. You built a castle to rip people off. Not once in all these years have I come across a person inside a big Wall Street firm who was having a crisis of conscience. Nobody ever said ‘This is wrong’.” Eisman understood Wall Street thoroughly: “What I learned from that experience was that Wall Street didn’t give a shit what it sold.”
MICHAEL BURRY – One eyed doctor turned investment manager who discovered he had Asperger’s Syndrome during his quest to be proven right about subprime mortgages being worthless. He figured it out in 2003 by himself. Burry had been “the first investor to diagnose the disorder in the American financial system. Complicated financial stuff was being dreamed up for the sole purpose of lending money to people who could never repay it.
STEVE LIPPMAN – Took Michael Burry’s idea about shorting subprime mortgages and sold it across Wall Street in order to hedge Deutsche Bank’s own subprime portfolio. “I love Greg,” said one of his bosses at Deutsche Bank. “I have nothing bad to say about him except that he’s a fucking whack job.” A trader who worked near him for years referred to him as “the asshole known as Greg Lippman.”
HOWIE HUBLER – Single handedly lost $9 billion for Morgan Stanley with one trade. He was the ultimate Big Swinging Dick as the head of mortgage bond trading who made $25 million the year he lost the $9 billion. CEO John Mack had no clue what his bond traders were doing. Hubler went on vacation and never came back.
John Gutfreund Michael Lewis
Tampa Gold says:
I feel like I just watched ‘A Clockwork Orange.’ (Go see it kids, you’ll love it!)
Simply breathtaking.
“…Complicated financial stuff was being dreamed up for the sole purpose of lending money to people who could never repay it….”
Around about 5 years ago, we could sense ‘something’ was up with the sub primes, alt-a’s etc..
Slice and dice mortgages and mix 1 part AAA with 99 parts ‘shitty sub prime,’ slap an AAA rating on it from Moody’s , and SELL, SELL, SELL!!! Cute
This brings much into perspective and focus of the 600+ TRILLION dollar ticking time bomb.
All those fucks up there and in particular, Warren ‘Complicit’ Buffet can go rot in hell for what they have done to our financial system.
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10th May 2010 at 12:28 am
Apollo says:
Here’s the funny part:
First, there was Enron. Those guys were either dead or in the slammer. Their fucks exposed. Then they took Enron – the culture, the greed, the insanity, the hubris, the complicated manipulations – and applied the whole racket to Wall Street. To fuck the whole country.
I struggle to find a parallel event, or era, of deliberate self-fuck in recorded history. But then, a country that voted for G W Bush, twice, deserves to be fucked.
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10th May 2010 at 3:36 am
Anonymous says:
Now, wait a minute, TG, I’ve heard estimates of anywhere from $135T to $175T from various sources, of the total magnitude of the toxic assets. Still, $1.75T in bail out money is spit in the wind.
Where do you come up with $600T???
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10th May 2010 at 6:42 am
Anonymous says:
Apollo, “a country that voted for G W Bush, twice,” and then voted for Obama, “deserves to be fucked.”
You left out the most pertinent part, considering it was Clinton who started ball rolling. But to be fair, it is the entire generation of post war baby boomers, destined for the dust bin of history, and what a legacy. The same as a swarm of locusts.
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10th May 2010 at 6:46 am
Dave Larsson says:
Funny, I, too, spent the weekend reading The Big Short. It really is the best finance book I’ve ever read, and I haven’t read very many (or maybe it’s more like I haven’t finished many).
What the book really brought home to me was that, when the Howie Hublers of the world lose $9,000,000,000, he’s not playing with his own money. To the contrary, he was permitted to keep tens of millions. The people who lost billions were his customers.
And Howie’s far from the only one named in Lewis’s book. What’s worse, I’ll bet most of them are back out there, running other peoples’ money.
THAT’s what’s screwed up. We’ve got a system set up whether there’s absolutely no incentive for the Howie Hublers of the world NOT to play with other peoples’ money, and EVERY incentive in the world for him to do so.
In the words of the Aimee Mann song, “It’s not going to stop/’Til you wise up.”
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10th May 2010 at 9:53 am
Dave Larsson says:
And yes, Jim, Steve Eisman DID
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10th May 2010 at 9:53 am
Dave Larsson says:
Ooops … Yes, Jim, Steve Eisman DID
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10th May 2010 at 9:54 am
Dave Larsson says:
(Fat finger disease? or something far more sinister?!?)
What I was trying to write was … Yes, Jim, Steve Eisman DID remind me of you. Particularly the part where he interrupts the speaker and makes a big zero with his hand. I think I might have actually seen you make that gesture.
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10th May 2010 at 9:56 am
ACAT says:
Great, now I think I’ll just go back to bed…
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10th May 2010 at 10:00 am
Administrator says:
Dave
Property Board Meeting when Rasmussen asked me what I thought of the Pittsburgh Remodel. BIG ZERO.
Incremental profit from Brooklyn
Incremental profit from Atlanta 2
Incremental profit from Miami 3
And so on.
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10th May 2010 at 11:07 am
THE BIG SHORT – HOW WALL STREET DESTROYED MAIN STREET : Silver Investor Blog says:
[...] this sordid tale of greed understandable to the common person. Read rest of article here… http://theburningplatform.com/blog/2010/05/10/the-big-short-how-wall-street-destroyed-main-street/ Share and Enjoy:Filed under Silver Market Update · Tagged withComments are closed.follow the [...]
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10th May 2010 at 11:23 am
Brian says:
Wall Street and Main Street are marketing driven, not market driven. We’re pushing products with clever tricks of the trade (creating artificial demand) instead of creating products based on the real demand of the market.
Psst. Hey kid, the first hit is free. I promise you’ll like it. Instant addiction to easy money.
Bud: How much is enough, Gordon? When does it all end, huh? How many yachts can you water-ski behind? How much is enough, huh?
Gekko: It’s not a question of enough, pal. It’s a Zero Sum game – somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply, transferred – from one perception to another. Like magic. This painting here? I bought it ten years ago for sixty thousand dollars, I could sell it today for six hundred. The illusion has become real, and the more real it becomes, the more desperately they want it. Capitalism at it’s finest.
http://www.time.com/time/magazine/article/0,9171,1000181,00.html
Bear Stearns boss Ace Greenberg once said he didn’t give a hoot about job applicants’ education so long as they had “a deep desire to become rich.”
http://www.marketwatch.com/story/15-signs-wall-street-pathology-is-spreading-2009-11-24
1. Gross denial of any moral damage caused by their rampant greed
2. Narcissistic egomaniacs with secret ‘God complexes’
3. Paranoid obsessives about secrecy, guilt and non-disclosure
4. Power-hungry need to control government using Trojan Horses
5. Borderline personalities who regularly ignore conflicts of interest
6. Pathological liars incapable of honesty even with own investors
7. Sole fiduciary duty to insiders, not investors, never the public
8. Moral issues are PR glitches, violations of ‘don’t get caught’ rule
9. Charitable donations are tax and PR opportunities, not moral issues
10. When exposed in a massive fraud, feign humility, fake an apology
11. When bankruptcy threatens, bribe friends in ‘Happy Conspiracy’
12. Engage co-conspirators to cover up, distract, do your dirty work
13. As money-hungry vultures they will prey on vulnerable Americans
14. Treat everyone not in the ‘Happy Conspiracy’ with tough love
15. Addicts consumed by money: ‘Jesus would throw them out …’
Warning: Washington, Main Street, none of us has “clean hands.” We’re all in bed with the “Happy Conspiracy,” touched by greed, turning a blind eye to Wall Street’s rapidly metastasizing moral and spiritual pathology: So ask yourself, do you believe America’s widespread “lack of a moral compass” will eventually trigger another, bigger market and economic meltdown, pushing America into the next “Great Depression II?”
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10th May 2010 at 12:20 pm
Gaffer says:
Brian makes a good point that many people on “main street” were willing conspirators. Main street was happy to go along for the ride on the tech bubble and the mortgage finance / housing bubble as long as the easy money came rolling in. Making big money quick and easy in one of the government sponsored rackets has been the game for main street since the mid 90′s.
I remember taking a car trip with an acquaintance near the height of the tech bubble and listening to him brag that he “looked great on paper” and to him complain that if only “goddam” Greenspan would lower interest rates even further, he could get rich. In this decade, successful house flippers became minor celebrities who were emulated rather than questioned. McMansions were being populated by realtors and mortgage brokers rather than doctors and lawyers. The signs of trickery and manipulation were there for anybody to see, but nobody questioned anything as long as the gravy train kept rolling.
Ultimately “main street” has been a pathetic fool and its hard to feel sympathy for a pathetic fool.
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10th May 2010 at 12:46 pm
Dave Larsson says:
Actually, Jim, I was thinking about how you messed up our chance to get Levitz as a tenant. You meanie.
Which reminds me: I know you’re going to like the linked article below. Juicy quote:
One of the Lehman-installed managers, the suit claimed, “stormed out of a meeting and yelled at the vice president of special investigations, loud enough for everyone in the vicinity to hear: ‘Your people find too much fraud!’ ”
http://www.thebigmoney.com/articles/judgments/2010/05/07/silencing-whistleblowers?page=full
Our financial system’s response to people who actually cared about detecting and preventing fraud in the mortgage industry = “Forget it, Jake. It’s Chinatown.”
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10th May 2010 at 1:42 pm
Dave Larsson says:
On the positive side (off topic, I know, just grasping for anything, anything that isn’t wholly dark) has anybody else read this? It’s Sec. Gates, invoking Eisenhower. Am I missing something, or did a Sec. of Defense actually say something that makes sense?
http://www.defense.gov/speeches/speech.aspx?speechid=1467
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10th May 2010 at 1:48 pm
B.C. says:
As despicable as Wall Street became, the true crime was in rescuing those people and institutions by the appalling unprincipled and complicit politicians in Washington (the Congress and the President primarily), instead of allowing the consequences to play out.
Of course there would have been a financial crisis had they not intervened. That it would have affected Main Street so adversely or unjustly I never believed, and still don’t.
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10th May 2010 at 1:49 pm
Administrator says:
Dave
We are on the same page. I posted my thoughts about Gates the other day.
http://theburningplatform.com/blog/2010/05/09/robert-gates-to-neo-cons-i-dont-want-your-money/
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10th May 2010 at 1:56 pm
Thurston Howell III says:
I remember in the mid eighties telling family members how Buffett was a genius with impeccable character. That fucker today is no better than a syphilis-infected whore on the corner of K street in DC. He fucking KNOWS that Goldman is the sleaziest outfit on the Street. And Buffett proudly announces to the world that Blankfein is a man of highest integrity. Don’t think for a second that Buffett isn’t keenly aware of the Goldman high frequency front running. Or very aware that Goldman was pushing toxic shit to the public at the EXACT same time they were shorting the motherfucking shit out of it. Buffett eats shit.
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10th May 2010 at 2:45 pm
Brian says:
http://news.hereisthecity.com/news/business_news/10558.cntns
Current Top 20 (at close of play Monday)
1. Oswald Gruebel, CEO – UBS
2. Bob Diamond, President – Barclays Bank
3. Brady Dougan, CEO – Credit Suisse
4. Richard Handler, CEO – Jefferies & Co
5. Vikram Pandit. CEO – Citi
6. Brian Moynihan, CEO – Bank of America
7. John Mack, Chairman – Morgan Stanley
8. Lloyd Blankfein, CEO – Goldman Sachs
9. Ken Lewis, former CEO, Bank of America
10. Larry Fink, CEO, BlackRock
11. Kenichi Watanabe, CEO, Nomura Holdings
12. Martin Blessing, CEO, Commerzbank
13. Jamie Dimon, Chairman & CEO, JPMorgan Chase
14. Baudouin Prot, CEO, BNP Paribas
15. Peter Clarke, CEO, Man Group
16. Bob Kelly, Chairman & CEO, Bank of New York
17. Frederic Oudea, CEO, Societe Generale
18. Josef Ackermann, CEO, Deutsche Bank
19. Stephen Green, Chairman, HSBC
20. James Gorman, CEO, Morgan Stanley
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10th May 2010 at 3:32 pm
wcmillionaire says:
A story beautifully told, one that has been known to many in the industry for a long time.
When lay-people read this, I am convinced they will not have a damn clue STILL!
Thanks, JimQ…good to see you back~!
“One born every minute…”
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10th May 2010 at 3:37 pm
MatrixFrontier says:
This is beyond simple. Everyone is culpable because no one did anything but cash the checks.
It is the mutual greed of the investor and the fund manager that makes this possible. Go to a casino and imagine that instead of a table game of chance, there was a guy every 5 feet explaining how to walk out with a million—and already managing a billion…does anyone really care HOW their personal money is obtained? That’s the issue. Loss of soul and dignity.
I am a capitalist completely-but the key we keep missing is value. What good or service was exchanged ? The entire fractional system is wrong as it was designed to create communities, not global funds.
Financial institutions (like our government) should facilitate our success and profit when we do. Technology used in the wrong implementation subtracts the accountability and repercussions-leaving only numbers…..we will crash soon and return to local communities….as it should have always been…and WOE to the 1st asshole who tries to start a bank.
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10th May 2010 at 6:44 pm
The New U.K. Prime Minister: David Cameron says:
[...] To get a better understanding of how Wall Street helped destroy the U.S. real estate market, just check out this article. [...]
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10th May 2010 at 1:16 am
THE BIG SHORT – HOW WALL STREET DESTROYED MAIN STREET | r. carey gersten says:
[...] on: http://theburningplatform.com/blog/2010/05/10/the-big-short-how-wall-street-destroyed-main-street/ Posted May 11, 2010 by Carey. Comments and trackbacks are open. Follow the comments feed. [...]
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10th May 2010 at 1:47 am
george says:
I predicted this on 9/12/2001 when I told co-workers that based on history war is always financed with debt and inflation and there is going to be a 2 front unwinnable war. Austrian Theory tells us what will happen (malinvestment) not how much and when. My hope is that the unholy trinity of Clinton/Bush/Greenspan get burn in the same sulphurous pit, but then again why do we think these rubes were put into power to begin with, luck?
Richard Ney predicted this in 1970, Harry Browne 1972. Still the blame is not on Wall Street they were playing by the rules even if it was a dishonest game, the blame is on Greenspan because without the insane money creation following 9/11 these other games could not have been played. The problem is George Bush bailed the financial system out instead of letting it fall. The illusion of too big to fail is insane, it should be too big to succeed and let the market sort it out.
Nothing but another chapter in the price of eternal liberty thing. Americans are getting the democracy they deserve, just not the one that libertarian/Austrians deserve. The empire always falls but when and on whom is always unclear until the dust settles.
Ask not for whom the bell tolls …
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10th May 2010 at 8:14 am
Novista says:
Screw the democracy, george — whatever happened to the Republic?
As for ‘rube’ Greenspan:
Some words he wrote in 1966 (commenting on the Great Depression):
“The excess credit the Fed pumped into the economy spilled over into the stock market — triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too little too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed.”
Now, if he understood that then, you think he forgot it ‘now’? I say he was just following orders.
They’re all puppets, just as Aldrich was in 1910. Whether it’s the CFR or the PIlgrim Society, someone is jerking their chain and they dance to the tune like monkeys.
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10th May 2010 at 9:14 am
Fat Pauly says:
The root of the problem is not Wall Street! If there is ever going to be real change the root of all this evil must be understood. The root is central bankers and their creature fractional reserve banking. These money masters control the money supply and rates, The FED made money easy and rates low and increased the money supply, and in turn Wall Street sucked it up and had a party. What do you expect these business people to do with all this easy money? The root is the shadow government, the elites, the money masters that are really in control.
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10th May 2010 at 10:02 am
Kill Bill says:
i think the problem is wall street after all its where the folks who created the federal reserve came from and what they protect. government is simply the means by which the cartel exerts control over its members.
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10th May 2010 at 10:45 am
Anonymous says:
Meanwhile good ol’ Uncle Warren Buffett (the bailed out Welfare Queen) is strumming away on his ukulele, while the financial companies he’s invested, such as Goldman Sachs, and Uncle Warren’s hero, Lloyd “doing God’s work” Blankfein.
Not too long ago Buffett was calling derivatives “weapons of financial mass destruction”, now he defends the same companies that are using derivatives in order to sell worthless crap and make themselves billions, then went these investments fail, the US taxpayer will bail out these criminal vermin.
It’s beyond disgusting, the only proper response to Warren and his ilk, is rage, followed, or at least one would hope, by some form of extreme violence….so if you can’t pay your mortgage, and have too many bills, don’t complain, just load up on shotguns and take them out to the Hamptons for a little hunting expedition.
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10th May 2010 at 11:08 am
David W. Young says:
Now it is up to us Americans who are still solvent to put the bastards in jail. Since the political winds are changing for Wall Street, Obama and Crew are realizing that they can make re-election gains by prosecuting these crooks, Pandorra’s Box is finally open. A copy of this book should be sent C.O.D. to the S.E.C. and whoever is at the helm of the Goldman Sachs and now JP Morgan Chase investigations. This fire will not burn down as the United States sinks into insolvency. All of the major banks are still insolvent with $Trillions of garbage loans that Wall Street securitized. Get 300 Million people mad enough during the throes of a Drepression, and the riots in Greece are going to only look like the opening salvo in the coming revolution. Stay tuned. It is going to get very nasty before this is all over by 2020.
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10th May 2010 at 12:33 pm
Tampa Gold says:
Speaking of opening Pandora’s box………..
http://www.forbes.com/2010/05/10/rating-debt-us-greece-markets-bonds_print.html
This guy wants to put the truth back into ratings. Bravo Mr. Weiss!
Forbes.com
Who Would Dare Downgrade U.S. Debt?
Matthew Craft, 05.10.10, 4:46 PM ET
The Weiss Group returned to the ratings game last week, and the research firm’s chairman has already made a provocative challenge to the dominant credit rating agencies: strip the AAA-rating from U.S. government debt.
In an open letter to Standard & Poor’s, Moody’s and Fitch on Monday, Martin Weiss argues that the three rating agencies should downgrade U.S. long-term debt. He acknowledges the turmoil it would create, punishing Treasury bonds and causing interest rates to spike. In Weiss’s view, however, leaving the AAA-rating untouched could ultimately prove far worse. It gives Congress a free pass to add to the public debt and encourages investors to buy Treasury notes and bonds, whose low yields, he believes, don’t compensate for the dangers.
“Worst of all,” Weiss writes, “by continuing to reaffirm America’s triple-A rating, you help create a false sense of security overall–the recipe for a possible meltdown in the market for U.S. sovereign debts.”
Rating agencies were widely criticized for failing to see the dangers in the real estate market and awarding high marks to bonds backed by subprime mortgages. Weiss argues that they were also too slow to downgrade insurance companies before a wave of life insurers went bankrupt in the early 1990s and failed to pull Enron’s investment-grade ratings until days before the company collapsed.
If the rating agencies had acted earlier, Weiss says, the issuers might have acted sooner to bolster their balance sheets. Downgrading the U.S. debt now, he reasons, could force the government to get its budget in order.
In an interview, Weiss said he doesn’t have a specific credit grade in mind. Any change would send the right message. “I’m afraid of what would happen if they don’t do it,” he said.
A downgrade can make it harder for a country to manage its debts. In late April, when S&P slapped a junk rating on Greece and lowered Spain and Portugal’s ratings, the countries’ bonds were sold off, causing yields to jump. The prospect of paying unbearable borrowing rates to finance its debts forced Greece to ask the European Union for bailout funds.
Weiss is hardly a disinterested observer; he’s a competitor. The Weiss Group announced last week that it was bringing back its bank and insurance ratings business, Weiss Ratings, after acquiring it from The Street.com. The Weiss Group sold the unit in 2006. Unlike Moody’s and S&P, which are paid by companies issuing debt, Weiss Ratings gets its fees from investors.
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10th May 2010 at 2:18 pm
Francisco Almeida says:
To anonymous & Apollo :
“a country that voted for G W Bush, twice,” and then voted for Obama, “deserves to be fucked.”
Here is the worst, watch the video clip :
“YouTube – President Bush Gets Booed at Baseball Game ! “.
http://www.youtube.com/watch?v=s6z40MHlzEc
… they booed … and missed a chance to stone him – for massive genocide of 1.5 million iraq people, under their names … with their permission …
Outrageous, would it be unbeliavable …
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10th May 2010 at 5:48 pm
Anonymous says:
” They only made one small mistake. They deluded themselves into thinking the crap they were selling to suckers wasn’t actually crap. They ended up buying their own toxic paper. Even though they knew that the ratings agencies were basically whoring out AAA ratings for fees, they believed that AAA rated securities they were buying and insuring weren’t actually worthless”
Hmmmm… take the con one step deeper. You get paid whether or not your firm goes down. You have the company suck up bad bets along with everyone else, to provide you with additional cover for your own bust-out.
“See, we thought they were good enough, we put our own (company’s/ shareholders’) money behind them.”
I mean, $100 million bonuses do you little good if you can’t also minimize your time in Danbury…
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10th May 2010 at 3:09 pm
Economy in DEATH spiral - Page 877 - Stormfront says:
[...] [...]
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10th May 2010 at 9:40 pm
» Financial News Update – 05/14/10 NoisyRoom.net: The Progressive Hunter says:
[...] The Big Short: How Wall Street Destroyed Main Street [...]
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10th May 2010 at 1:12 pm
W.Palmer says:
……and the next one is Carbon Credits.
Trillions of dollars spinning around this planet, coming from god knows where and going to god knows where. Totally unaccountable, totally untraceable, willed by brainwashed acolytes of Global Warming, and this time encouraged by, promoted by, and mandated by politicians. All under cutesy pictures of cuddly polar bears….. not one of which will either perish or be saved. The perfect scam.
This is bigger than most people think, and when it gets going…. unstoppable.
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10th May 2010 at 1:19 pm
John says:
How is it that most of these financiers have German names?
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10th May 2010 at 5:32 pm
major says:
The issue is not that we can figure out what they did to us AGAIN, but why we sit here like chumps while they get away with our loot….
Given a couple years they will remake themselves and start conning the same group to shear their wool again…
Is this the nobility of humanity, is this how we maintain self respect and a sense of honor.
All we have is the footprint we leave in life and that fades damn fast…..you’d think we want to leave some sense of respectability and humility behind
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10th May 2010 at 7:17 pm
fatvito says:
Thanks be that people have stopped blaming people that got scammed into mortgages they could not afford. True there is a bit of blame there but nothing compares to likes of Vampire squids of Wall street and all the baby squids. They need some time bubbling for air in the toxins of the Gulf.
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10th May 2010 at 10:06 am
Face the Facts says:
If you think you have it made, sitting with your golden egg, home paid for in a gated community, food in the seller, mercedes in the garage, I doubt your the only one that knows about it.
What “we the people” are about to face with unemployment at all time high, people with no jobs and they have lost everything they have worked for there whole life, depression sets in, a backbone to fight takes over they are mad and angry, do you think these people are just going to lay down in a corner with the homeless and starve to death? Re think that part over. Your front door will be kicked in and you will be getting your chance to look down a gun barrel feeling very helpless, with your gun out of reach because it is put a way with a trigger guard on it.
As our dollar continues to be worth less and less, hyper inflation will be up on us all like a thief in the night.
The reallity of the second revolution will be in the works, people will be flipping out when they dont have enough money to buy a loaf of bread. The electricity is gone, The internet will not be as easy for people when they have no electricity. Cell phones will be throwed in the streets.
Its not if its going to happen its how soon it will be here. Prepare the best you can.
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10th May 2010 at 10:49 am
Khl says:
I was a partner in a collection law firm in NYC during the sub-prime scam. During the height our debtors were getting 20 to 30 ref is per week. We would shake our heads at the idiocy of this game. A guy can’t afford to pay a $3500 visa bill can get a $500k refi and pull out 100k to boot. Something was obviously very wrong with the system. In addition the middle class was going more and more into hock. We knew the systemic credit crisis was coming. We just didn’t know when or how to bet against the monster. The only thing that can ever prevent these bubbles and subsequent crashes from occurring is the gold standard. It prevents politicians, bankers and wall street crooks from inflating the money supply to pay for their wars, scams and outright theft. The last war not paid for with paper money , but rather gold occurred during Napolean’s reign.
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10th May 2010 at 1:44 am
Face the Facts says:
Khl
I agree with you, go to this link http://inflation.us/videos.html and educate everyone you know, this group of people definatley have it figured out.
America is going to go through some very hard times, Khl after you watch the clip I would like to know what you think of it, there are several other short clips to watch as well.
I like getting other peoples views on things.
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10th May 2010 at 11:47 pm
Capt. Jack says:
I guess now would be a good time to shoot the greedy homeowners.
It’s crystal clear. From the very beginning the homeowners have gamed the system. They started by tricking the property appraiser (lender’s agent) into submitting an outcome-based appraisal.
Then, millions of homeowners shrewdly conned the “lenders” into dismissing all agency and fiduciary responsibility in the underwriting process….going so far as to force the “lenders” into forging documents.
Then, the greedy homeowners forced the “lenders” to securitize the loan in such a fashion as to bifurcate the mortgage from the note.
On top of that, the homeowners secretly cooked up the concept of “Credit Default Swaps” and forced the “lenders” to insure the collateral at the full (outcome based) value 30X over.
Having successfully pulled the wool over everyone’s eyes – these irresponsible homeowners showered themselves with well deserved bonuses.
Realizing they were too big to fail, these irresponsible, reckless homeowners lined the pockets of legislators and received enormous sums of taxpayer bailouts.
The result of these cunning maneuvers by the fraudulent homeowner scheme has them sitting fat and happy in the cat birds seat. Yup, that’s how they did it. And they’re getting away with it.
Savings drained – check, 401ks all gone – check. Kicked out of their homes – check. “Lenders” made whole many times over via Credit Default Swaps – check. Homeowners foreclosed and “lender” buys back property for pennies on the dollar – check.
Follow the money and you’ll find the culprit. It’s about time we hold these homeowners accountable.
Good call. The websites below are sponsored by a well-healed, politically connected, PR machine of greedy volunteers…and contain detailed information on how the collusion on Main Street has ripped off Wall Street.
Don’t look though…it’s just spam.
http://www.foreclosurehamlet.org
http://www.4closurefraud.org
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10th May 2010 at 7:52 am
Face the Facts says:
Capt. Jack
think of the money the banks and lenders made off the refi charges alone, I say the people were victoms of circumstance, shoot the gubbermint for forceing Freddie and Fannie into lowering there requirements to buy the home in the first place, no money down and fluxuating interest rates should of never happened. just my opinion.
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10th May 2010 at 1:11 pm
Kill Bill says:
more destruction of main street. damn unio.,,,wait. damn cartels!!
They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.
California to Pennsylvania
The workings of the conspiracy — which stretched from California to Pennsylvania and included more than 200 deals involving about 160 state agencies, local governments and non- profits — can be pieced together from the Justice Department’s indictment of CDR, civil lawsuits by governments around the country, e-mails obtained by Bloomberg News and interviews with current and former bankers and public officials.
“The whole investment process was rigged across the board,” said Charlie Anderson, who retired in 2007 as head of field operations for the Internal Revenue Service’s tax-exempt bond division. “It was so commonplace that people talked about it on the phones of their employers and ignored the fact that they were being recorded.”
Anderson said he referred scores of cases to the Justice Department when he was with the IRS. He estimates that bid rigging cost taxpayers billions of dollars. Anderson said prosecutors are lining up conspirators to plead guilty and name names.
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10th May 2010 at 10:44 am
D. L. says:
Jim, I read this, and all your other stuff where you basically blame the whole shebang on “baby boomers.” Other than that old guy pictured (maybe), I see absolutely NO baby boomers (unless they are so rich they can completely disguide their age) in the pictures above.
Now I think you are a good writer and thanks for sending me the links to your articles. But, as a Baby Boomer myself, I hope you appreciate the fact that it is counter-intuitive as well as counter productive to blame it all on us.
THIS (God I hate to sound Marxist!) IS A CLASS ISSUE, NOT AN AGE ISSUE!!!
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10th May 2010 at 6:19 pm
D. L. says:
Okay, you got me…they were baby boomers back then. but still, we ain’t all that evil, eh?
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10th May 2010 at 6:51 pm
Administrator says:
D.L.
None of my readers are evil except for Dick Cheney.
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10th May 2010 at 7:32 pm
acjitsu says:
Just a quick little note about PEAK OIL. Here is a really good link to a presentation given by Michael Ruppert about it.
http://www.cctv.org/watch-tv/programs/author-and-peak-oil-activist-michael-ruppert
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10th May 2010 at 7:05 pm
Brian says:
Hey Jim,
What are your thoughts on the expanded mark-to-market FASB proposal, sensei? Might be a good article.
http://www.insurancenetworking.com/news/financial_services_fasb_accounting_standards-24874-1.html
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10th May 2010 at 2:03 pm
fatvito says:
I am trying to wrap my head around borrowed money. If everyone in the world is in debt, who are we all in debt to?. How can everyone owe everyone money? Is this a shell game on a massive scale? The debt of all nations can not be held by any single or even a couple entities. Please give me a lesson in why we all cant say fuck off and go bankrupt at the same time, like a big fat flash forward episode.
Who exactly are the worlds creditors?
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10th May 2010 at 4:15 pm
Administrator says:
fatvito
We owe most of our debt to China, Japan, and the Middle East. They produce and we consume. We borrow and they lend.
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10th May 2010 at 4:25 pm
fatvito says:
Is there no debt in China, middle east and Japan?
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10th May 2010 at 4:51 pm
Administrator says:
They have debt, but they are owed more than they owe. They are net creditors and we are net debtors. When we made stuff and exported it, we were net creditors. No more.
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10th May 2010 at 4:54 pm
Rod says:
Time to move this one to the archives ! 10th May is O-L-D news…
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10th May 2010 at 8:25 pm