Carl Levin drops repeated s-bombs during Goldman hearing

[ayabe]

Chairman Carl Levin, to the delight of the crowd, continually repeated a descriptive, colorful word typically left out of family newspapers that was used by a top Goldman executive to describe a deal it made for clients.

The security, named Timberwolf I, a collateralized debt obligation of other collateralized debt obligations that were based not on actual home mortgage bonds but instead on those bonds' movements, was referenced in a June 22, 2007, email from a Goldman senior executive, Tom Montag, to another, Dan Sparks. Sparks is testifying today before Levin's panel.

In his email, Montag remarked of the Timberwolf I deal, "oy, that timeberwof [sic] was one shitty deal."

Levin used the word "shitty" 11 times -- eliciting multiple rounds of quiet giggles -- in questioning Dan Sparks, the former head of Goldman's mortgage department, about why Montag would describe it as "shitty," how long they had known it was "shitty," and whether they knew the deal was "shitty" when they peddled it to clients.

"Our clients' interests always come first," Goldman says on its website.

That security was rated less than three months prior to Montag's email. It lost 80 percent of its value within five months of issuance. Sparks and Montag have since left the firm.
**************************************************************
http://www.huffingtonpost.com/2010/04/27/goldman-sachs-hearings-li_n_553318.html#s85332


NSFW video in the link, he's really bringing the thunder, this is something unrelated to the charges filed as far as I know but more or less the same meme, Goldman knowingly sold bad investments to people while labeling them as solid.

 

[Genx87]

And what is he going to do about it besides saying naughty words? Get the next bailout ready?

 

[ayabe]

And what is he going to do about it besides saying naughty words? Get the next bailout ready?

So you're on that bullshit bandwagon too?

Talk to your friends in the Senate, this is all just an excuse for Obama's socialist jackboot to stomp on the free market producers, right?

 

[nonlnear]

And what is he going to do about it besides saying naughty words? Get the next bailout ready?

Nope. Well not directly at least, but indirectly it's already happening. The next bailouts will not be done by national governments. The big push now is to create an international body with power to tax banks directly, bypassing national sovereignty over the financial system. Bank bailouts may never be a federal issue again - and if you think that's good news, think again.

 

[PJABBER]

Actually, the respondent was not given an opportunity to respond to the question. His attempt to put the comment in context was suppressed by Levin's grandstanding.

When a salesperson calls something "shitty" it may mean several things. Levin insisted that it meant the product was somehow flawed. The respondent tried to reply that a product of that type has a varying price dependent on demand/market conditions and the buyer is an equal player in setting the value/price. That is why it is called "trading."

"Shitty" could mean that the salespeople were having a hard time moving the product, it could mean the price was going against the target price and the company would not gain an acceptable margin, it could mean the sales staff wanted to sell something else, maybe at a higher commission rate or bonus and GS was telling them to work this product as a priority.

We don't know, because Levin wanted to badger the witness and did not allow him to answer. It is called grandstanding and it goes on all the time at these hearings. Glad to see you bought into the show.

I've had a preliminary look at some of the imputed malfeasance and see not much of anything substantive. And I do not see anything criminal whatsoever. There might be a civil action that a customer could take if the risk/ratings were deliberately misidentified but that does not seem to be the case.

In any case, understand that products of this type are sold only to institutional investors and not to the general public. Institutional investors are expected to conduct their own due diligence, if they do not and a salesperson "sells" them something, the fault is mostly that of the buyer and if the buyer makes enough mistakes like that he will be fired. In these kind of transactions, the buyer is not "sold" all that often. They are looking to structure a particular portfolio with diverse pieces, all of which have variable prices and variable volatility, but the whole of which produces a certain hedge or return.

"Shitty" here cannot be determined without a clear identification of context, and that was not allowed by Levin so that he could score points.

 

[cubeless]

kind of funny that cnbc's report on this even misses one iteration and actually printed 'shitty' instead of 'sh***y'... and the dems and their shills say the teapartiers are crude and stupid...

 

[Lemon law]

By their own Goldman admission, it was Montag who called the timberwolf shitty.

So when Levin quotes Montag, who is doing the cussing, Levin or Montag?

But if the GOP wants to go to the mat to block needed financial reform, the GOP may be really crusin for a brusin. Even the normally apathetic American people know how shitty those Goldman types were and they have little sympathy for these wall street reckless gamblers who collapsed the financial system.

 

[PJABBER]

Wasn't Goldman-Sachs the second largest contributor to Obama's presidential campaign?

Like George Soros and his connections to leftist governments, for every dollar that was paid out to Obama, these financial companies like Goldman have gotten thousands of dollars in return.

If this financial "reform" bill passes, the biggest companies, Obama supporters all, get the government to back their bets. After all, they are "too big to fail."

So far as I know, no private companies are backed up like this anywhere else in the world. This will give American financiers at this level a significant competitive edge.

The Street LOVES 80% of this bill. They may not like the derivatives part, but they can live with it for the rest. The people who are screaming about any curtailment of derivatives are those that need them to hedge their positions as good business practice. The financial companies will still make their money either way.

Thus we have the Obama continuing to pay off his largest donors with taxpayer money and the full faith and credit of the United States, so long as that lasts.

 

[Narmer]

Actually, the respondent was not given an opportunity to respond to the question. His attempt to put the comment in context was suppressed by Levin's grandstanding.

When a salesperson calls something "shitty" it may mean several things. Levin insisted that it meant the product was somehow flawed. The respondent tried to reply that a product of that type has a varying price dependent on demand/market conditions and the buyer is an equal player in setting the value/price. That is why it is called "trading."

"Shitty" could mean that the salespeople were having a hard time moving the product, it could mean the price was going against the target price and the company would not gain an acceptable margin, it could mean the sales staff wanted to sell something else, maybe at a higher commission rate or bonus and GS was telling them to work this product as a priority.

We don't know, because Levin wanted to badger the witness and did not allow him to answer. It is called grandstanding and it goes on all the time at these hearings. Glad to see you bought into the show.

I've had a preliminary look at some of the imputed malfeasance and see not much of anything substantive. And I do not see anything criminal whatsoever. There might be a civil action that a customer could take if the risk/ratings were deliberately misidentified but that does not seem to be the case.

In any case, understand that products of this type are sold only to institutional investors and not to the general public. Institutional investors are expected to conduct their own due diligence, if they do not and a salesperson "sells" them something, the fault is mostly that of the buyer and if the buyer makes enough mistakes like that he will be fired. In these kind of transactions, the buyer is not "sold" all that often. They are looking to structure a particular portfolio with diverse pieces, all of which have variable prices and variable volatility, but the whole of which produces a certain hedge or return.

"Shitty" here cannot be determined without a clear identification of context, and that was not allowed by Levin so that he could score points.

Or it could mean exactly what Levin implied it meant. Besides, when these assholes go into these hearings they should expect a drubbing. The hearings are usually political showcases to satiate the angry mob.

 

[PJABBER]

Or it could mean exactly what Levin implied it meant. Besides, when these assholes go into these hearings they should expect a drubbing. The hearings are usually political showcases to satiate the angry mob.

The nature of the product is not like a bar of soap being evaluated as to whether or not it cleans a particular stain better than another bar of soap.

It is a hedging instrument. A counter party wants something that will balance out a position or protect a bet on the down or upside. What is hedged, to what extent and for how long and at what price determines what might be offered to the counter party.

It could certainly be a "shitty" product if it doesn't do what it was structured to do. A certain percentage of these don't function as anticipated, because the markets are not necessarily predictable, which is the whole reason to offer such products to begin with.

The variability and the complexity of factors that come into play, the amounts at risk and on offer, are why the players get payed so much. You want to play with billions, you had better be sure to buy the best players available. And nobody pays better than Goldman. They may own your life, but you are being payed more than anyone in the world for it. And when they buy a politician, he had better stay bought, even if he has to say something different to the media lackeys.

Yeah, anyone going in front of our Congress had better be prepared to be reamed. I don't think I have ever been at any hearing where that did not occur. The people's business requires bloodsport.

 

[Moonbeam]

Actually, the respondent was not given an opportunity to respond to the question. His attempt to put the comment in context was suppressed by Levin's grandstanding.

When a salesperson calls something "shitty" it may mean several things. Levin insisted that it meant the product was somehow flawed. The respondent tried to reply that a product of that type has a varying price dependent on demand/market conditions and the buyer is an equal player in setting the value/price. That is why it is called "trading."

"Shitty" could mean that the salespeople were having a hard time moving the product, it could mean the price was going against the target price and the company would not gain an acceptable margin, it could mean the sales staff wanted to sell something else, maybe at a higher commission rate or bonus and GS was telling them to work this product as a priority.

We don't know, because Levin wanted to badger the witness and did not allow him to answer. It is called grandstanding and it goes on all the time at these hearings. Glad to see you bought into the show.

I've had a preliminary look at some of the imputed malfeasance and see not much of anything substantive. And I do not see anything criminal whatsoever. There might be a civil action that a customer could take if the risk/ratings were deliberately misidentified but that does not seem to be the case.

In any case, understand that products of this type are sold only to institutional investors and not to the general public. Institutional investors are expected to conduct their own due diligence, if they do not and a salesperson "sells" them something, the fault is mostly that of the buyer and if the buyer makes enough mistakes like that he will be fired. In these kind of transactions, the buyer is not "sold" all that often. They are looking to structure a particular portfolio with diverse pieces, all of which have variable prices and variable volatility, but the whole of which produces a certain hedge or return.

"Shitty" here cannot be determined without a clear identification of context, and that was not allowed by Levin so that he could score points.

I think what he meant by shitty was a worry that if God found out they'd be damned for eternity.

 

[nick1985]

Is the financial reform legislation doing anything about Fannie and Freddy?

 

[ayabe]

Actually, the respondent was not given an opportunity to respond to the question. His attempt to put the comment in context was suppressed by Levin's grandstanding.

Negative, watch the thing again. His context was in trying to state that by the time the email was written, they weren't pushing that security hard anymore. That was proven to be an outright lie as the timeline is very clearly laid out, two weeks or so after the shitty email, they were pushing that security as a #1 priority for their sales team.

 

[Moonbeam]

Is the financial reform legislation doing anything about Fannie and Freddy?

or 800 dollar toilet seats and how catnip can improve bee farming.

 

[PJABBER]

Negative, watch the thing again. His context was in trying to state that by the time the email was written, they weren't pushing that security hard anymore. That was proven to be an outright lie as the timeline is very clearly laid out, two weeks or so after the shitty email, they were pushing that security as a #1 priority for their sales team.

Like I said, the context was not allowed to be made clear, and I doubt the respondent could actually do that as he was shuffling through hundreds of pages of evidence to himself get a context in mind. Levin's staff had laid out the question with multiple page references so all Levin had to do was look over his granny glasses, read and grandstand.

If the respondent had that question in advance he could have provided a cogent answer but that is not how the game is played. The best you can do is say that you don't know and that you will get back to the good Senator at a later time with the correct response.

Have you ever sold anything? Management making something a #1 priority means nothing without context. Do they want to clear the product so that they can go on to a new one with the possibility of more market acceptance? Do they feel the time value of the product is going against them (these things have expirations.) Is the markup high and sales management getting a bigger override if they close so much business by the end of the week or the end of the month?

If something is not selling, it is definitely a "shitty" product to the sales team. Management may also call it "shitty" because it is not selling, the right potential buyers are too limited, the pricing is off, any number of reasons. Make it a #1 priority by shaving required margins, and bonusing the sale and it is a fuckin' monster, man!

Now, if it were the quantitative analysis/investment banking team that structured the product that called it a shitty product and did so without taking into account the sellability of the product, then maybe Levin's nitpicking haranguing would make sense. But it was the sales team saying it, and so I tend to think they did not use the term in the way Levin claims they did.

 

[boomerang]

This is a dog and pony show. Political grandstanding in an election year.

There are so many ex Goldman employees in administrations both present and past that it would make your head spin. The Goldman ties to Congress are numerous.

The derivatives market for sub prime mortgages could not have existed if not for...sub prime loans. How many members of Congress grilling them today had their fingers in that. Bring them in, sit them down and tear them a new asshole. A few will get fired for culpability purposes and then it will be back to business as usual - with the blessing of Congress. Was what Goldman did callous and catastrophic - of course. Our government enabled them to do it. Do not forget that.

I wonder how they can all keep a straight face. Decades of lying, cheating and stealing most likely make it a cakewalk.

This is about as bad as it gets in government. You, your neghbor, your parents, your friends are out of work because of our government. Pick your candidates carefully in November

 

[Genx87]

So you're on that bullshit bandwagon too?

Talk to your friends in the Senate, this is all just an excuse for Obama's socialist jackboot to stomp on the free market producers, right?

Which bandwagon would that be?

The only thing I expect out of our legislative branch is stern words while they craft more public money and protections to these douchenozzles.

 

[Fern]

Lately, I've been getting the impression that when the Dems start insulting some industry that means they're about to throw more government benefits at them.

Fern

 

[nonlnear]

This is a dog and pony show.

That kind of goes without saying for 99% of Congressional hearings - especially ones where there are cameras other than C-SPAN.

 

[PJABBER]

Lately, I've been getting the impression that when the Dems start insulting some industry that means they're about to throw more government benefits at them.

Fern

Hehehe. Me, too.

 

[ayabe]

Which bandwagon would that be?

The only thing I expect out of our legislative branch is stern words while they craft more public money and protections to these douchenozzles.

Well then I guess I misunderstood you as being on the liquidation fund being another bailout bandwagon, which it's not.

My apologies.

 

[JeffreyLebowski]

So you're on that bullshitty bandwagon too?

Talk to your friends in the Senate, this is all just an excuse for Obama's socialist jackboot to stomp on the free market producers, right?

you left out a few letters.

 

[Harvey]

Wasn't Goldman-Sachs the second largest contributor to Obama's presidential campaign?

Political contributions aren't illegal so the question isn't whether Goldman-Sachs contributed to either party. It's whether they got any special treatment in return for those contributions.

Goldman-Sachs contributed more to Democrats than Republicans, but they contributed more to Democrats. From the lashing they're getting in Congress, and considering the Fed's fraud suit against them, it doesn't seem to have bought them much.

It would be interesting to know how much they contributed to Republicans who are currently filibustering to block financial reform legislation.

 

[blackangst1]

Watch the 2 hour video in my sig (The Fall of The Republic) and you will understand this is all showboating. GS will not fail, this is not a D or R issue, nor will serious action be taken against them.

 

[Jhhnn]

Well, Righties, it was what you wanted and worked towards for 30 years- Free Market Self Regulated International Banking. To be realistic, it was *doomed to crash" because that's what it does, how that works for as long as there have been banks. Derivatives, aka "implements of mass financial destruction", per Warren Buffet, are just a new implement in the toolkit.

We had a choice when it all fell down- we could re-live 1931, we could bailout the banks, or we could nationalize them. With the Bush Admin in charge, only the second option was going to fly anywhere, so that's what happened. It's the way your team made it, regardless of any obfuscations that might be employed to conceal that fact.

Bankers and everybody else gave more money to Dems this time around, mostly because Repubs might as well have had "LOSER!" tatooed on their foreheads, given the the fact that they left anybody who wasn't already rich chained to the oars of the economy when they ran it aground.

And it hasn't been quite like the "Pay to Play" methodology of Repubs when they were in power- just because Bank Execs made campaign contributions doesn't mean they'll get what they want... well, unless their repub friends manage to stonewall reform. Bankers and other bigtime wheeler-dealers like it just the way it is- Too big to fail, and too reckless to do anything else... Like these guys, paying 15% capital gains tax for gambling with OPM...

http://www.nytimes.com/2010/04/01/business/01hedge.html?th&emc=th

Shitty? Depends on who's on the winning end of the con game, that's all...