1. catdynamics
  2. the shape of things to come

the shape of things to come

By catdynamics on April 20, 2010.

Cal Sate Budgetpocalypse - Dr Free-Ride blogs on CSU San Jose State near term situation.

Shocking Fraud From Financial Scum - MarkCC rips into the Squid.

See, it is like this: Goldman Sachs organized a league, they then talked to a gambler and expedited a bribe to the ref to arrange for a game to be thrown, while also running the book on the bets.

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Minor correction: while it's a member of the CSU system, the San Jose campus calls itself San Jose State University.

-- SJSU grad student

is there a hedge fund other than Magnetar that is known to have played both sides of the mortgage CDOs? To me it seems like Chu-Carrol is exaggerating the extent of the sleaze.

I know that CDOs and CDSs offer some unethical opportunities, but for the most part I think they are very useful things. Anything can go badly if used very stupidly.

well, of course there is Goldman Sachs, but we've known for a long time that they were unscrupulous

also, in the defense of hedge funds: the definition of hedging is to play both sides!

pnut, if anything Mark & Steinn have understated the extent of the sleaze, or at least the incompetence, by restricting it to one set of transactions. The direct "victims" were mostly large pension funds. What exactly is the management fee that the poor working stiff pays in his/her 401(k) buying if "their" expertise is blindly following some rating agency or a glossy ad.? Steinn's team has a puppet manager too!

The financial services industry has effectively created a Mobius strip chain of responsibility where no one is responsible because everyone is responsible in an endless loop. The 401(k) system which ultimately provides the fuel for these shenanigans is brilliant for this purpose. The eventual burden falls on small, generally unsophisticated, stakeholders who don't have much clout.

I can't help but think Matt Taibbi did a disservice to cephalopods with the vampire squid meme. I mean, when did a squid last sell you a collateralised debt obligation stuffed with shitty mortgages carefully selected by the biggest short in the market?

arunav, i was mainly talking about this type of transaction and the role of hedge funds. I know investment banks are full of scum like Salomon's Gutfreund and legions of scamming securities dealers/brokers.

Yes but these transactions would not have been possible if institutional investors had not blindly bought the junk GS was peddling. CDSs and CDOs may have their place but these were the "market forces" that were supposed to keep things from going out of hand. They didn't work either.