The Angry Hand of God: Register for this? I think not.

His name was Robert Paulson.

Did he do that "Addicted to Love" video? I farking love that song.

Well, there's also this minor issue that the Bookie told the Sucker that the Hot Tip came from a general consensus of handicappers, when in reality it came from the High Roller -- who deliberately picked a broken-down nag.

Well it's comforting to know that the world economy was/is run according to the script for The Sting.

TheGhostofFarkPast: some explain to me how paulson isn't going to jail or even being prosecuted for this? he orchestrated it all and he is walking free.

What did he do that was illegal? GS had no legal obligation to listen to him and he had no legal obligation to the people that invested.

Dickbag: yes, yes he is.
Criminal: I don't think so.

GS committed the crime, here.

TheGhostofFarkPast: some explain to me how paulson isn't going to jail or even being prosecuted for this? he orchestrated it all and he is walking free.

Because nobody in this country wants to admit that wall street is essentially above the law. we little people are watched closely and if we step an inch over the line a ton of shiat hits us on the head. But the rich and powerful can play games with the lives and money of investors and if they play fast and loose with the rules...nothing happens.

America - land of the free and home of the brave.

Weaver95: TheGhostofFarkPast: some explain to me how paulson isn't going to jail or even being prosecuted for this? he orchestrated it all and he is walking free.

Because nobody in this country wants to admit that wall street is essentially above the law. we little people are watched closely and if we step an inch over the line a ton of shiat hits us on the head. But the rich and powerful can play games with the lives and money of investors and if they play fast and loose with the rules...nothing happens.

America - land of the free and home of the brave.

Paulsen didn't break any laws here. I'm far from a wall-street apologist, but he didn't do anything criminal. If you said to GS "Hey, screw that guy over so I can make a buck" and they do: You didn't break any laws either because GS has zero legal obligation to you (as was the case with Paulsen) and you have zero legal obligation to the guy you screwed.

Tjos Weel: The only exception would be if Paulson conspired with GS on the fraud. But, I dont think he did, he just designed a product that he knew would make him money. GS sold it fraudulently but that wasnt part of Paulson's plan.

I agree to an extent. But how could Paulsen conspire in any way that makes him liable? Regardless of what Paulsen actually did, isn't the full legal obligation here on the shoulders of GS?

I Said:
Paulsen didn't break any laws here. I'm far from a wall-street apologist, but he didn't do anything criminal. If you said to GS "Hey, screw that guy over so I can make a buck" and they do: You didn't break any laws either because GS has zero legal obligation to you (as was the case with Paulsen) and you have zero legal obligation to the guy you screwed.

oh i'm sure everything Paulson did was well within the strict letter of the law. And that's rather my point - they know what they're doing is wrong, but they've worked hard (and spent tons of money lobbying congress) to make sure that the laws are either vague and/or weakly written so as to make their unethical behavior entirely legal. Not to mention the culture on wall street encourages people to act like rapacious barbarians without care or regard for the consequences of their actions.

Weaver95: oh i'm sure everything Paulson did was well within the strict letter of the law. And that's rather my point - they know what they're doing is wrong, but they've worked hard (and spent tons of money lobbying congress) to make sure that the laws are either vague and/or weakly written so as to make their unethical behavior entirely legal

If only there was some way to punish someone like that.

Oh wait, there is. Let's crucify them.

Weaver95: oh i'm sure everything Paulson did was well within the strict letter of the law. And that's rather my point - they know what they're doing is wrong, but they've worked hard (and spent tons of money lobbying congress) to make sure that the laws are either vague and/or weakly written so as to make their unethical behavior entirely legal. Not to mention the culture on wall street encourages people to act like rapacious barbarians without care or regard for the consequences of their actions.

I'm in full agreement with you here, which is why my only problem with the dems finance reform bill is that it doesn't go far enough. Although there are still details being worked out, I doubt the final product will go far enough either.

doglover: Weaver95: oh i'm sure everything Paulson did was well within the strict letter of the law. And that's rather my point - they know what they're doing is wrong, but they've worked hard (and spent tons of money lobbying congress) to make sure that the laws are either vague and/or weakly written so as to make their unethical behavior entirely legal

If only there was some way to punish someone like that.

Oh wait, there is. Let's crucify them.

Historically speaking, that's generally what happens. If we do nothing, eventually wall street will steal enough money from enough people that the imbalance will be blatantly obvious. And if the law doesn't do anything for the victims, eventually - once there are enough victims and when they're desperate enough - then things will take their natural course.

welcome to the human race.

And the tax payers are the unwilling whale...

Tjos Weel: I agree with Weaver too, but think you are entirely wrong on the solution. Go the other way. Make it clear what kind of caveat emptor environment it is and stop backstopping failure. If Wall Street doesnt like Paulson's ethics then, they can stop dealing with him. Shunning can be an effective strategy, especially when it makes you non-liquid.

Then you need to give the gov. the legal authority to have a controlled, forced liquidation of assets if financial firms hit a certain threshold and are deemed "too big to fail", otherwise one sh*tty firm takes down every firm and every municipality it has offices in.

FWIW I support that approach.

Ex Parte Gilligan: Debeo Summa Credo: I don't think Paulson did anything legally or ethically wrong (and GS probably didn't either, btw)

When GS misrepresented to their counterparty who had assembled the contents of the underlying CDO, they crossed a line.

That AND presenting it as a winner when it was built to be anything but. As an investment firm they have the legal obligation to give their best advice. Even if it's sh*t advice, it has to be their best. They scammed the investor in two ways here: misrepresenting the counterparty and telling someone that dogsh*t was gold when they knew it was dogsh*t.

Debeo Summa Credo: There, tried to fix for subby as best I could. Paulson wanted to bet against securities that he thought would drop in value. He asked GS to find counterparties who would take the other side of the bet (i.e., had the opposite opinion). GS took a cut (vig, in gambling parlance), and it was Paulson's opinion vs. the counterparties' opinions. Paulson was right, he wins. No foul.

Except Paulson helped raise the horse and knew it to be diseased, and this was never disclosed to the other bettor.

I Said: Ex Parte Gilligan: Debeo Summa Credo: I don't think Paulson did anything legally or ethically wrong (and GS probably didn't either, btw)

When GS misrepresented to their counterparty who had assembled the contents of the underlying CDO, they crossed a line.

That AND presenting it as a winner when it was built to be anything but. As an investment firm they have the legal obligation to give their best advice. Even if it's sh*t advice, it has to be their best. They scammed the investor in two ways here: misrepresenting the counterparty and telling someone that dogsh*t was gold when they knew it was dogsh*t.

And the rules of the game were rigged to make it all legal.

Guysmiley: What I still don't get is how the rating agencies who rated those sub-prime craptastic CDOs as triple-A came out of this whole mess unscathed.

think about it. it makes perfect sense, once you realize that wall street is above the law and nobody in that world faces consequences for their actions.

Weaver95: Guysmiley: What I still don't get is how the rating agencies who rated those sub-prime craptastic CDOs as triple-A came out of this whole mess unscathed.

think about it. it makes perfect sense, once you realize that wall street is above the law and nobody in that world faces consequences for their actions.

Have you read The Big Short by Michael Lewis?

Debeo Summa Credo: Sounds good in theory, but doesn't work that simply in practice. Just the fact that the govt is taking over an institution will cause a panic amongst counterparties just like a bankruptcy. And by the time it is apparent that govt intervetion is necessary, it is already too late. When would the gov't have taken over Lehman? AIG? Morgan Stanley? etc.

Lots of changes will need to be made to the overall regulatory and disclosure framework, but the answer isn't going to be some simple structure with catch phrases like "too big to fail".

Yeah, the difficulty is "when", but I'm thinking you can work that out with more transparency, perhaps? I mean, Lehman knew the end was near and was scrambling to prevent it and hide it. Further, the collapse happens so fast it's difficult to handle.

But if you could create a threshold and say "over this, you are too big to fail" and with that add regulatory practices such as additional transparency and additional auditing, all paid by the financial institution itself, then at least there's a chance to discover these problems a little earlier.

Or just limit leveraging, derivatives trading, and leveraging. Maybe leveraging, too.

Lastly, the % of assets investment firms can have tied up in each other, and block all trading and investing between companies that are deemed too big to fail, so as to prevent them from tearing each other down.

It sounds draconian but IMHO you need draconian measures at this point because any limits you impose will be fought by armies of lawyers looking for loopholes.

SurfaceTension: Weaver95: Guysmiley: What I still don't get is how the rating agencies who rated those sub-prime craptastic CDOs as triple-A came out of this whole mess unscathed.

think about it. it makes perfect sense, once you realize that wall street is above the law and nobody in that world faces consequences for their actions.

Have you read The Big Short by Michael Lewis?

no, but it's on my list of books to read.

Debeo Summa Credo: They actually invested in this deal themselves on the long side and took a big loss - they, as a firm, had no foreknowledge that the underlying securities were d*gshiat. They packaged the structure and presented it to investors to make their own decision - they weren't acting as investment advisor to either side here.

I've been misinformed. Thank you for clarifying.

I Said:
It sounds draconian but IMHO you need draconian measures at this point because any limits you impose will be fought by armies of lawyers looking for loopholes.

there is an additional difficulty - these companies have a LOT of money and they like not being transparent. Thanks to recent SCOTUS rulings on campaign donations, they now have the right to pour unlimited amounts of funding into supporting politicians who won't increase the strength of regulatory agencies or put rules into play that would prevent things like this from happening again.

i'm not sure we're going to see someone step up and do the right thing. call my cynical if you must, but I don't see any D.C. insider sacrificing their career to clean up wall street for the good of the nation. they're not known for their altruistic behavior!