Basically, taxpayers are paying those end of year bonuses: Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative …
Show Us on the Doll Where the Invisible Hand Touched You
Innovative Financial Instruments
Our Galtian Overlords sound more and more like a Soprano’s capo with each day: According to the lawsuit, the Bear traders would sell toxic mortgage securities to investors and then sell back the bad loans with early payment defaults to the banks that originated them at a discount. The traders would pocket the refund, and …
The Market Is a Basket Case
Oops: New Jersey Governor Chris Christie has learned that talking about state insolvency may have a cost. About 20 minutes after Christie, 48, told a town-hall meeting in Paramus today that health-care costs “will bankrupt” the state, the New Jersey Economic Development Authority cut its tax-exempt school-related bond offering by more than half to $712.3 …
This Must Not Stand
A court in Ohio ruled that mortgage lenders don’t get a mulligan on their foreclosure paperwork – present the court fake papers made out of play-dough and they could get the same sanction that I would get for doing that. The sarcastic side of me wonders how long it will take for the House Judiciary …
Prerequisite
I first encountered Elizabeth Warren’s work when I took a bankruptcy seminar some years ago. The class was billed as a “lunchtime” course. I thought that meant they’d give us lunch. It meant we skipped lunch to take the course. I was hungry and therefore cranky, and flipping impatiently through the “supplementary” course materials (“right-leaning, …
Emptiness Is Loneliness, and Loneliness is Cleanliness
Aww, poor babies: Bonus season is fast approaching on Wall Street, but this year the talk does not center just on multimillion-dollar paydays. It’s about a new club that no one wants to join: the Zeros. Drawn from a broad swath of back-office employees and middle-level traders, bankers and brokers, the Zeros, as they have …
Emptiness Is Loneliness, and Loneliness is CleanlinessPost + Comments (49)
Information Asymmetry
To put a finer point on my post below, the people profiled by Michael Lewis in his book The Big Short are a perfect example of what I’m saying. A handful of guys like Steve Eisman and Michael Burry both figured out what was happening even while Wall Street was bursting its seams with mortgage …