Wednesday, April 28, 2010

Apparently Always Golden - Goldman Sachs

There's lots of good Goldman Sachs stuff on the net right now including Blankfein's statement and Senator Levin's questions. The Daily Beast has a nice aggregation of all things Goldman.
But I would like to share this eternal email from a young Goldman Sachs employee that made it's way to the net.
Goldman's 'Fabulous' Fab's Conflicted Love Letters

Fabrice Tourre and his girlfriend talked like a couple very much in love.
They emailed back and forth about how they wanted to curl up in each other's arms and how they looked forward to tender moments together. Tourre, a Goldman Sachs bond trader, also wrote in the emails of the impending collapse of the subprime mortgage market and how he was masterminding ways at Goldman to make money from it.
Little did they know that three years later these very personal emails written through Tourre's Goldman Sachs e-mail account would become part of one of the biggest investigations into the subsequent financial crisis.

"Just made it to the country of your favorite clients!!! I'm managed (sic) to sell a few abacus bonds to widow and orphans that I ran into at the airport, apparently these Belgians adore synthetic abs cdo2," Tourre wrote in June 2007.

Earlier in 2007, in an e-mail to a friend, Tourre shares his fears that the product he helped create is crumbling -- and he has a sense of humor about it.

"It's bizarre I have the sensation of coming each day to work and re-living the same agony - a little like a bad dream that repeats itself," Tourre writes. "In sum, I'm trading a product which a month ago was worth $100 and which today is only worth $93 and which on average is losing 25 cents a day ...That doesn't seem like a lot but when you take into account that we buy and sell these things that have nominal amounts that are worth billions, well it adds up to a lot of money."

The collection of e-mails also show that Tourre was not the only person at Goldman with confidence the subprime market was doomed.

Daniel Sparks, a former head of the mortgages department at Goldman, is also expected to testify on Tuesday before the Senate Permanent Subcommittee on Investigations.
"According to Sparks, that business is totally dead, and the poor little subprime borrowers will not last so long!!!" Tourre wrote in a March 7, 2007, email to his girlfriend.

Goldman is going to coast out of this situation quickly and, as usual, everyone at the top is going to get huge bonu$e$....but it amuses me the laxity with which the banker boys trashed their own deals in their business email. In a world where all electronic communication is monitorable, you would have thought that they would have been a little more careful...oh, but I forgot...why would they bother with a corporate culture of hubris.

But what I like best so far of the Goldman saga is John Hinderaker's Demonizing Goldman Sachs, an analysis of the testimony where the bankers outshone the Senators on every level, leading him to make this conclusion

I'm not a particular fan of either Goldman Sachs or Congress, but today's hearing confirms that, given a choice, I'd rather have Goldman Sachs regulating Congress than Congress regulating Goldman Sachs. Goldman's employees are much smarter, considerably more honest, and far more likely to have my interests at heart.

Oh Snap!

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6 comments:

Laguna Beach Trad said...

Nice post. The spectacle of smug, self-righteous, corrupt US politicians grilling international bankers is infuriating.

The amusing thing is, Washington and GS need each other, so it will be interesting to see where this goes.

Thrilling!

WendyB said...

Great stuff!

Deja Pseu said...

"Honest?" They were betting against investments they were pitching to their clients. I'm all for making a buck, but do believe in ethical business practices. If my financial advisor were trying to get me to buy a stock she was shorting, I'd be pretty miffed and quickly looking for another advisor!

Belle de Ville said...

I have nothing good to say about the government or Goldman Sachs but yes LBT they both need each other. This, harkens back to how the Government was dependant on JP Morgan way back in the day.
Wendy...as my son said, watching the testimony is better than watching the OJ trial.
Pseu, Goldman had contempt for their clients and had no ethical problem with trading against their interests.

The Townhouselady said...

My favorite line was...

"Our clients came to us looking for risks and that's exactly what they got."

Jackholes

The Preppy Princess said...

It was like dinner theatre sans the dinner. Unbelievable. Naturally I sat there after a certain exchange whining, "Okay, so if I were still running the teewee station and ran the Carl Levin soundbite without beeping s-----, would the station be fined for indecency?"

Hmm, I'm sounding perilously close to "Bitter, party of one." Cranky Princess.

Smiles at you Miss BHB!
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