April 26, 2010 archive

Open Thread

Goldman Sachs’ fraud epitomizes everything that is wrong with America: “the haves” repeatedly screwing “the have-nots,” not by being better or smarter, but through sheer, premeditated criminal fraud.

Goldman’s e-mails sound all too reminiscent of the criminal disregard for humanity at Enron before they collapsed (via Mish Shedlock, emphases mine):

Fabrice Tourre, a Goldman Sachs Group Inc. executive director facing a fraud lawsuit in the sale of a mortgage-linked investment, said an index that facilitated derivatives trading in the market was “like Frankenstein.”

The so-called ABX index is “the type of thing which you invent telling yourself: ‘Well, what if we created a ‘thing,’ which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?'” Tourre said in a Jan. 29, 2007, e-mail released yesterday by Goldman Sachs. Watching the index fall is “a little like Frankenstein turning against his own inventor.”

In a March 7, 2007, e-mail Tourre describes the U.S. subprime mortgage market as “not too brilliant” and says that “according to Sparks,” an apparent reference to Daniel Sparks who ran Goldman Sachs’s mortgage business at the time, “that business is totally dead, and the poor little subprime borrowers will not last too long!!!”

A few months later, a June 13, 2007, e-mail shows Tourre claiming, “I’ve managed to sell a few Abacus bonds to widows and orphans that I ran into at the airport, apparently these Belgians adore synthetic ABS CDO2,” using short-hand for asset- backed collateralized debt obligations squared, or CDOs made up of tranches of CDOs containing asset-backed securities.

Of course they knew their financial products were 100% crap.  Such criminal fraud is at the very heart of Wall Street’s booms, busts, and bail-outs.  What in hell is Obama thinking?  Having the nation bail these criminal pricks out is beyond moral hazard.  Maybe like Bush “The Haves” and “The Have-Mores” constitute Obama’s “base,” as well.  His economic strategy sure looks that way.