- 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
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.