Monthly Archives: July 2009

The Bonuses and the Theft at Goldman Sachs. Ultradogs.

Bonuses on Wall Street are yet again in the headlines. And Two things just appeared in the news about Goldman Sachs:

1. They’re predicting an enormous profit this year, surpassing the last good year anyone else had, namely 2007; and the bonuses they plan to pay break records, as I’ve mentioned in an earlier post. The entire recession, it appears, was a market adjustment which cleared out the bulk of their competition. The recession was great for them. They’ve also been permitted to repay their TARP loan. I’d like to know why Obama lets Treasury permit this.

I really want to know.

2. Goldman had a break-in, and called the Justice Department about it. An employee who had just departed for a better job with another company, Sergey Aleynikov stole some ultra-secret software from Goldman Sachs that “could be used to manipulate markets.” 

So somebody with talent hates Goldman. And did something about it. He uploaded the program to an encrypted, shared server.  This immediately calls to mind the newsgroups, and all the old beta testers of Microsoft software who leaked copies of everything out to the public. Why do they do it? Because they don’t like the company. It’s their version of rebellion, and it’s the most effective kind around.

I secretly — sweatily — swarthily tip my hat to this guy. We are already convinced that Goldman has been manipulating the markets for many years, and caused incalculable harm. A recently dispossessed person, someone who’s lost his or her job or home or both — looking at this issue from a stance in the financial gutter — may feel perhaps it’s only just if the rest of the world got to use this software. But of course, now it’s been removed.

Note: Sergey Aleynikov may have accomplished the theft using an ultradog, since Russians are known for owning them. Here is a picture of Putin’s ultradog, an amazing animal.

<I>Putin's ultradog.</I>

Putin's ultradog.

Wall Street Journal Article on Prime Mortgage Defaulting.

Diverting from Wall Street Bonuses for a moment, let’s look at that article by Stan Leibowitz from the Wall Street Journal claiming that subprime mortgages didn’t fuel the economic meltdown.

The writer claims he’s made a study and “found” that it is negative equity, not subprime loans, that led to the majority of defaults on mortgages. He’s claiming that prime loans with no money paid down are the major culprit (putting the blame back on the borrower again. Giving the public a slap in the face, with love from the Big Banks.).

Yeah. But when a loan company makes you a prime loan and you pay no money down, they will usually then arrange a second loan on top of the first to provide for that money normally given as a down payment on a house. Countrywide, for instance, made this type of arrangement. (Because somehow many lenders still paid lip service to the money-down standard, while shedding every other standard along the way.) That second mortgage might be a subprime loan and the WSJ writer has not identified it either way.

Either way, the no-money-down mortgage is a liar loan. It was improper to approve it. And furthermore: Liar Loans have a much greater impact on this WSJ writer’s “study” than he will say, because liar loans are supposed to be those in which the lender failed to ascertain the real financial status of the borrower.

That isn’t really what they are. They are more often loans for which the lender MADE UP  the financial status of the borrower — as testified to by a whistleblower former employee of Ameriquest.  See the interesting video.

So that’s two parts of his stats I don’t believe.

Borrowers can borrow only what you lend them. We know who started the meltdown and profited from it. Wasn’t borrowers…