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Senator Carl Levin To Goldman Sachs @ Congress "You Sold Shitty Shitty Deals" - Video
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Senator Carl Levin To Goldman Sachs @ Congress "You Sold Shitty Shitty Deals" - Video - April 27, 2010, 04:47 PM



This guy got raw with some GS Execs testifying earlier this morning!

I've never seen a Senator use this kind of language on the floor of Congress in a hearing. You could tell he wanted to jump over the desk and throttle their asses.


Shortened Version:
http://www.youtube.com/watch?v=WMBMR...layer_embedded

Longer Version:
http://www.youtube.com/watch?v=cTMY5...layer_embedded

Martin Scorcesse Agrees ...
http://www.youtube.com/watch?v=mFTeG...layer_embedded

Update: Let me clarify the context of this video.


Levin was quoting the exact language used in a exhibit. It was an email from a Goldman sales broker sent to his superior regarding the Timbewolf deal he was being instructed to sell to consumers.

He knew it was shit - his superior knew it was shit. But he was told to make selling it his top priority because GS's mortgage department wanted as much of it out there as possible so they could take a larger short position against it.

Boiler Room tactics, but instead of the RIP - they're TRIPLE DIPPING and taking the sales commission for selling it, the underwriting commission for writing and structuring it (Which they knew was full of toxic high leverage crap synthetic assets (Not even REAL assets) doomed to fail), and then profiting on the short side by taking insurance against the SHITTY DEALS they were selling.



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

- Nicolo Machiavelli 1469-1527


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April 27, 2010, 06:21 PM

Nothing like profanity to undermine your position. He does realize that CSPAN is a public broadcast?

Idiot response to a legitimate problem.
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April 27, 2010, 06:40 PM

Quote:
Originally Posted by BlackHatch View Post
Nothing like profanity to undermine your position. He does realize that CSPAN is a public broadcast?

Idiot response to a legitimate problem.
Wrong. You need to understand the context.
Levin was quoting the exact language used in a exhibit. It was an email from a Goldman sales broker sent to his superior regarding the Timbewolf deal he was being instructed to sell to consumers.

He knew it was shit - his superior knew it was shit. But he was told to make selling it his top priority because GS's mortgage department wanted as much of it out there as possible so they could take a larger short position against it.

Boiler Room tactics, but instead of the RIP - they're TRIPLE DIPPING and taking the sales commission for selling it, the underwriting commission for writing and structuring it (Which they knew was full of toxic high leverage crap synthetic assets (Not even REAL assets) doomed to fail), and then profiting on the short side by taking insurance against the SHITTY DEALS they were selling.



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

- Nicolo Machiavelli 1469-1527


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April 27, 2010, 06:44 PM

Jesus Hiest what do you do?

Choke slam approved.


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April 27, 2010, 07:30 PM

The funny thing is that people don't realize that Goldman is paid to be a bookie on deals like this. They make bets and find someone who wants to take the opposite side of the bet. In this case, they held short positions along with other clients of theirs. This isn't uncommon. Had the housing bubble persisted a little longer, they would have lost.

Why do we feel the need to punish a bank for correctly timing a short position on the housing bubble?

*edit* This was indeed a shitty deal in hindsight. They were taking a huge gamble in guessing it was a shitty deal at that time.


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Last edited by mangle; April 27, 2010 at 07:51 PM..
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April 27, 2010, 08:40 PM

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Originally Posted by mangle View Post

Why do we feel the need to punish a bank for correctly timing a short position on the housing bubble?

*edit* This was indeed a shitty deal in hindsight. They were taking a huge gamble in guessing it was a shitty deal at that time.
Because it wasn't a TRUE short position taken out with public information, Mangle. It was a short position taken out with INSIDER non-public information (insider trading).

Goldman was the one who BUILT and sold the financial product, so they have exclusive knowledge of what was going inside of it, and touted it as something solid and coerced the ratings agencies to rate it as A-Grade,

In addition, Paulson (the outside independent investor who encourage them to build the product so he could take out short positions) was helping Goldman select which mortgages to go into the Abacus Investment tool.

Obviously, that's a clear conflict of interest and illegal! That's like having a NBA official working with a bookie to decide the Betting Line on the game and then betting on the game he's officiating!

A NBA ref is in jail right now for doing just that.

But the kicker is that:

(1) When asked the very direction question today:
"Does Goldman Sachs have a fiduciary responsibility to its clients and investors" ... only ONE of the four on the panel answered in the affirmative. Everyone else gave some sideways scrurrilous answer, but not a "Yes." That's damning because when you go to get any of your securities licenses you are bound to always act in the best interest of your clients.

(2) Fabrice Tourre's emails in 2007 pretty much co-sign the fact that he knew what he developed and what GS was selling was overleveraged crap and would blow up, and he was conflicted with selling against the clients that Goldman represented - but felt since he was going to profit quite largely he was doing some sort of social good (or at least - as he said in email "that's how I lie to myself to rationalize it"_



Guys I think many of us on here are old and mature to understand that when buying securities, it's buyer beware. There's no warranty expressed or implied. However, a company cannot knowingly sell you SHIT and represent and have it rated as GOLD, then take out a position against me - frankly, that's outright fraud.



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

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April 27, 2010, 10:27 PM

Your first paragraphs are correct, except for the insider trading part. ACA (the people who lost) was collateral manager on the deal. They were the final say in the selection of securities. Paulson claims his short position was openly discussed. No one has refuted that. ACA was insuring bets the other way. They lost. Plain and simple.

You might make the case that the people at ACA took the wrong bet, which, in hindsight, they did, but you can't call it insider trading. ACA knew damn well what was inside that package, and they bet on it going up.

On a side note, my officemate (fellow EE grad student) got an offer at Goldman yesterday. Care to guess how much? It'll make you sick. I'm questioning why I'm pursuing this whole engineering thing. I think he's leaning towards going to a NJ hedge fund for a little less $$ and more bonus potential though.


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April 27, 2010, 10:51 PM

Quote:
Originally Posted by mangle View Post
Your first paragraphs are correct, except for the insider trading part. ACA (the people who lost) was collateral manager on the deal. They were the final say in the selection of securities. Paulson claims his short position was openly discussed. No one has refuted that. ACA was insuring bets the other way. They lost. Plain and simple.

You might make the case that the people at ACA took the wrong bet, which, in hindsight, they did, but you can't call it insider trading. ACA knew damn well what was inside that package, and they bet on it going up.

On a side note, my officemate (fellow EE grad student) got an offer at Goldman yesterday. Care to guess how much? It'll make you sick. I'm questioning why I'm pursuing this whole engineering thing. I think he's leaning towards going to a NJ hedge fund for a little less $$ and more bonus potential though.
Well having pursued IB at one point in my life, I can tell you Goldman doesn't talk to new associates for less than $250K a year + team and department bonus which can easily push compensation above $400K.

And yup, they WANT former engineers because you guys can understand working in mathematically models and math theories like no other. It's what you do.

If you're a Computer Science grad, specially anything to do with Programming or SAS/SPSS they DEFINITELY want you because you can help build and develop black box trading alogrythms which increasingly they use to to trade.

I still consider moving over to power finance, but sometimes I think because of my age I missed my window.

9/11 happened a few months prior to me graduating and the interest I had from both Bear & Merrill were rescinded.

I had committed to Bear because of their strong Bond trading desk. When they hard stopped on new hires because of economic tension of 9/11 and the Tech Bubble Bust, they basically sent me a $5000 check along with a rescindtion letter. Merrill's head hunter flat out told me, don't bother checking back until 2003.



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

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April 27, 2010, 10:54 PM

Screwa rich people. Kill em and sell their stuff. 1 case of champagne=30 cases of Bud Light, 60 cases of Natty Boh. 1 yacht=60 jet skis and a floating dock. 1 Armani Suit= every Lynyrd Skynyrd shirt made, EVAR

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April 28, 2010, 08:07 AM

Quote:
Originally Posted by Heist View Post
Wrong. You need to understand the context.
Levin was quoting the exact language used in a exhibit. It was an email from a Goldman sales broker sent to his superior regarding the Timbewolf deal he was being instructed to sell to consumers.

He knew it was shit - his superior knew it was shit. But he was told to make selling it his top priority because GS's mortgage department wanted as much of it out there as possible so they could take a larger short position against it.

Boiler Room tactics, but instead of the RIP - they're TRIPLE DIPPING and taking the sales commission for selling it, the underwriting commission for writing and structuring it (Which they knew was full of toxic high leverage crap synthetic assets (Not even REAL assets) doomed to fail), and then profiting on the short side by taking insurance against the SHITTY DEALS they were selling.
Thank you.....




I realize that he was referring to the exact language, however, he continued to refer to the deal out of context with the elicit language.

That was my point. Saying something over and over again is a sure sign of a weak point.

Quote the text, make your statement, and then attack the basis of the argument without restating it 20 times.
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April 28, 2010, 08:20 AM



Heist like shizzy chicken? How about shizzy wok?
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April 28, 2010, 08:21 AM

Yup, you're right on the offer. I had an offer out of undergrad from Goldman (for much less), but didn't take it because I really didn't want to be an 80-100 hr/wk analyst. This 60 hr/wk associate thing is looking more attractive.

As for the SEC case, I'm betting this one will be dropped but more will come.


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April 28, 2010, 09:16 AM

Quote:
Originally Posted by mangle View Post
Yup, you're right on the offer. I had an offer out of undergrad from Goldman (for much less), but didn't take it because I really didn't want to be an 80-100 hr/wk analyst. This 60 hr/wk associate thing is looking more attractive.

As for the SEC case, I'm betting this one will be dropped but more will come.
You definitely don't want to work for a major financial firm until you get your grad degree. Maybe do 1-2 years and then bounce, but definitely don't stay for more than 24 months without a Grad degree.

People with with undergrad degrees will perpetually be treated like a work donkey and never be in line to get promoted above manager (unless you happen to be exceptionally talented).

And yeah, get comfortable with the idea of 70hr work weeks or never truly being on vacation, downtime, or away and inaccessible.
As the say on the street, "If you're not here when we need you - you won't be needed for very long."

But on the bright side, it's strictly a pay for performance environment where you're pretty much assured that every 2 years your base rate will double until you hit the Managing Director plateau.

I thrive in those kinds of environments, and frankly, at this point in my life I'd much rather work 70hrs a week and have my compensation ennumerated in a contract and be directly compensated for my performance vs. having to gamble with another start-up company and "wait and see" how the company does and then pray you get a net % bump each year that exceeds the erosion due to inflation.



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April 28, 2010, 09:27 AM

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Originally Posted by BlackHatch View Post
Thank you.....


I realize that he was referring to the exact language, however, he continued to refer to the deal out of context with the elicit language.

That was my point. Saying something over and over again is a sure sign of a weak point.

Quote the text, make your statement, and then attack the basis of the argument without restating it 20 times.
BlackHatch,
Clearly you've never been involved in a lawsuit, cross examination, deposition, or any sort of court/arbitration proceeding that involved evidentiary exhibitions.

Restating and reinforcing, multiple times, the damning words and exact language used by the offender(s) is a fundamental tactic use by any counselor or advocate.

That it was a "bad" word is of no consequence in terms of lessening the potency of the argument. The word itself, increases the potency of the argument and severity of the fraud.

They didn't say, "Hey, this wasn't the best deal I've ever seen put together." or "This deal sucked." No, flat out "This is a shitty deal..."



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

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April 28, 2010, 09:34 AM

Quote:
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BlackHatch,
Clearly you've never been involved in a lawsuit, cross examination, deposition, or any sort of court/arbitration proceeding that involved evidentiary exhibitions.

Restating and reinforcing, multiple times, the damning words and exact language used by the offender(s) is a fundamental tactic use by any counselor or advocate.

That it was a "bad" word is of no consequence in terms of lessening the potency of the argument. The word itself, increases the potency of the argument and severity of the fraud.

They didn't say, "Hey, this wasn't the best deal I've ever seen put together." or "This deal sucked." No, flat out "This is a shitty deal..."
"Clearly" you don't know what you are talking about as it pertains to me. Once again, you are putting your cart before your horse.

If you think that these "investigations" in Congress are aimed at the truth, you are wildly misguided. This is grandstanding at its best. Don't take this as bashing a Dem because the Repub are just as guilty on other issues.
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