Goldman’s Self-Described ‘Shitty’ Timberwolf CDO Deal
FT.com has a must-read piece on one of Goldman’s disastrous sub-prime CDO deals.
Tom Montag, then a senior Goldman executive and now head of corporate and investment banking at Bank of America, was quoted as describing the deal in an e-mail as follows: ‘Boy that timeberwof (sic) was one shi**y (sic) deal,’ according to the Senate subcommittee.
The subcommittee said that Matthew Bieber, the Goldman trader responsible for managing the deal, later described the day that the Timberwolf security was issued as ‘a day that will live in infamy’, recalling the language President Franklin Roosevelt used for the Japanese attack against Pearl Harbor.
The $1 billion CDO was sold to a Bear Stearns owned hedge fund. It went on to lose 80% of its value in FIVE MONTHS — causing the hedge fund to liquidate and contributing to the demise of Bear (who was conveniently one of GS’ biggest competitors).
The Timberwolf CDO was a financial time bomb, not an investment product. And GS knew it. If nothing else comes out of this, it should be a big fat signal to anyone considering doing business with GS — don’t.
Bloomberg has more details. After saying, “Boy that timberwolf was one shitty deal”, Thomas Montag told the Senate panel today, “I didn’t use that term in respect to this deal”.
The balls on these guys are truly Randy-sized…
And for no specific reason other than my liking it:
9 Comments
at what point is Bear at fault for failing to do any due diligence on an investment of that size? At what point do we start looking at S&P/Moodys for the bogus ratings?
Letter from Rep. Kaptur to DOJ demanding a requesting investigation of Goldman signed by 60 Reps:
http://act.boldprogressives.org/cms/sign/letter_wallstreet_criminal
April 30, 2010
BILL MOYERS:
Welcome to the Journal. Once upon a time, a whole lot of just plain Americans woke up to realize the economic system was working against them. They had believed in it; they worked hard to make it work for them. They knew its shortcomings but saw in it the way to a decent return for their labor and a better future for their families.
Then, one day, calamity struck: The system turned on them. And they discovered that they had been betrayed, bamboozled, by the people at the top.
But they didn’t hang their heads and turn tail, like a dog whipped by its master. They organized and fought back — millions of them in a grass roots movement for democracy. What they did became known as the Populist Moment, an extraordinary time in our country’s history.
http://www.pbs.org/moyers/journal/04302010/watch.html
Sunday, May 2, 2010
Things Do Not Compute
http://tinyurl.com/2as3l3t
where’s the transparency we were promised?
The White House, Federal Reserve and Wall Street lobbyists are kicking up their opposition to an amendment to audit the Fed as a Senate vote approaches, Sen. Bernie Sanders (I-Vt.), the lead sponsor of the measure, said on Monday.
http://tinyurl.com/22l9wn7
May 3, 2010
Ron Paul and Alan Grayson: Audit the Fed!
http://tinyurl.com/2ezprwa
What Was Fab’s Job Description
Why a Criminal Case Against Goldman Sachs Matters and Why Charges Could Stick
By PAM MARTENS
It all sounds eerily familiar to the wealth transfer maneuver by Goldman Sachs Trading Company in the asset bubble of 1928. The Trading Company was a closed end fund (called a trust in those days) that Goldman Sachs created and offered to the public at $104 a share, stuffed with conflicted investments while paying Goldman a hefty management fee, only to end up a few years after the 1929 crash trading at a buck and change. On May 20, 1932, Walter Sachs, President of the Goldman Sachs Trading Company, was grilled by the Senate Committee on Banking and Currency. The implication was the same as the current round of Senate hearings: Goldman royally fleeced its customers to line its own pockets.
My advice to Goldman is to throw yourself on your sword. Come clean on everything and clean house. Put a modest gym in the basement of your new digs and donate the 54,000 square foot space to charities for the struggling folks you ripped off in their pensions and 401(k)s. And maybe it’s time to apologize for what you did in 1928 and 1929 as well.
Then have a sit down with Warren Buffett and start co-authoring OpEds on why the Glass-Steagall Act separating investment banks from insured mom and pop funds at commercial banks must be restored. If you have any trouble finding an argument for this, just lay all those recently disclosed internal emails end to end and observe the narcissistic, sociopathic culture you’ve created out of the uber-testosterone Wharton School boys.
http://www.counterpunch.org/martens05042010.html
We need accountability…
Monday, May 3, 2010
Turning the Tide on Lawcap and Fincap
http://inpoints.blogspot.com/2010/05/turning-tide-on-lawcap-and-fincap.html
We also check out the headlines on Lloyd ‘I’m Too Mysterious’ Blankfein, Bernie ‘I’m Just a Market Maker’ Madoff and Warren ‘I Love My Goldman Investment’ Buffett.
http://tinyurl.com/28dwwwp