and it turns out that this invasion was illegal under international law, should they be prosecuted as war criminals?
how about if someone says we should torture POWs? and we do torture POWs? are those people guilty now of war crimes?
how about if someone says we should kill all the lawyers? if some lawyer gets shot, should that person go to prison?
how about if some website is full of comments about how downloading movies and music in violation of copyright law is legitimate because the companies are evil? should those commenters all go to prison as copyright violators too?
like Lawrence McDonald (Lehman bond trader, wrote Colossal Failure of Common Sense) and Janet Tavakoli, (wrote textbooks on Structured Finance and CDOs)
the calling of 'gambling' as 'insurance' is a piece of propaganda, that goes back to the 1800s, when the "Policy Shops" sold "insurance policies" that certain lottery numbers would come up (and sold these 'policies' to people too poor to buy real lottery tickets)
the thing that makes CDS 'gambling' is that the two parties exchanging cash don't have to have any relationship, whatsoever, to the thing they are gambling on.
sometimes CDS are used as a hedge, but the vast majority of CDS in the bubble period (which were the guts of Synthetic CDOs) had nothing to do with hedging.
and most of this 'hedging' argument is used by people in positions like Llloyd Blankfein , being dragged in front of Congress to explain why his company was selling CDOs that his own people called 'crap' as though they were good investments.
Team Themis was being payed, purposely, to do the kind of work that Barr was doing.
Barr's actions against anonymous were simply a logical extension of his ordinary job description. Find 'targets' who are opposed to your clients interests, and then collect intelligence on them, for purposes of character assassination.
I mean, thats what HBGary was payed to do as part of Team Themis. Not Aaron Barr, HB Gary, Berico Technologies, and Palantir Technologies.
what about the rights of people like Glenn Greenwald and others? what about the invasions of privacy committed by Team Themis and others like them? What about the leaked emails that would allegedly place Barr in the position of hacker, as he experimented with his companies own 'offensive' (as opposed to defensive) tools and practices?
fraud is not the same thing as leverage. fraud enables leverage.
and these quants enabled the fraud. while looking the other way.
if you are smart enough to figure out all of these complicated algorithms and math to model CDOs then you were smart enough to ask some basic fundmanetal questions, like 'where are the fucking loan tapes'.
in fact, some people at JP Morgan did exactly that, and thats why for a good while, JP Morgan did not get involved in any Mortgage CDOs. they knew they were crappy, risky products, incredibly overvalued.
its all in 'Fool's Gold' by Gillian Tett. . . JP Morgan actually invented the precursor to the Synthetic CDO, they called it a BISTRO and it was just a way to market Credit Default Swaps.
this shit is not complicated. fraud is not complcated. only the justifications, rationalizations, and lies that are piled on top of it are complicated.
before it started. lets take hedge fund manager Bill Ackman for example.
he was telling anyone who would listen that the Monoline insurance companies were based on fraud. they were insuring stuff they were never supposed to have insured, risky stuff, and then lying to investors about it.
what happened to him? He got investigated by the SEC. he could have gone to jail for a long time. the monolines didnt investigated, the ratings agencies didnt get investigated, the New York State Insurance regulators didnt get investigated for allowing this.... Bill Ackman got investigated.
the monolines were like mini-AIGs - they enabled the fraud of the CDO market to continue even after AIG stopped insuring certain CDOs at the end of 2005. the monolines continued, and helped push the bubble up. then they all collapsed and died in 2009 - they were too small to get bailed out. their only mistake was not being bigger.
its described in Confidence Game by Christine S Richard
the 'bullshit morality' of Ackman , well, it actually made him a lot of money.
the same for the 3 main groups in the Big Short.... they tried to warn the government about what was happening, and journalists, and they were largely ignored. their 'bullshit morality' made them a lot of money too.
of course some people dont think these 'big shorts' behaved morally..... because they profited from the crash (Yves Smith thinks they helped it... because Synth CDOs were made up of their bets (CDS))
anyways.
there were others. Janet Tavakoli in particular wrote some textbooks on CDOs , describing a lot of the fraud that was inside the business. Her 'bullshit morality' might not get her the fame and TV spots, but then again, her type of 'bullshit morality' is the foundation of all modern civilization.
and these models were the fundamental enabler of the fraud.
these models were directly linked, in a fundamental manner, to the corrupt and conflicted relationship between the banks, the ratings agencies, and the insurance companies.
the models were created by a collaboration between the ratings agencies and the banks. the banks also employed people to 'game' the models. and the banks also payed the ratings agencies based on the results of those models calculations.
it was massive, industry wide fraud at a fundamental level. without that fraud, there could have been no massive amount of bad debt pile up.
one great example of this is the story of Magnetar Capital ----- if it hadn't been for the fraud of the 2006/2007 era, then the bubble would have collapsed much, much sooner. but it kept inflating and inflating - because synthetic CDOs could continue being created and rated highly and sold to investors, based on the fraudulent use of these models.
Structured Finance and Collateralized Debt Obligations - Janet Tavakoli Lost Trust - Lang Gibson (CDO expert who worked for Merrill Lynch) The Trillion Dollar Meltdown - Charles R Morris A Colossal Failure of Common Sense - Lawrence McDonald (former Lehman bond trader) and Pat Robinson Confidence Game - Christine S Richard EConned - Yves Smith Diary of a Very Bad Year - Anonymous Hedge Fund Manager + Keith Gessen The Big Short - Michael Lewis All the Devils are Here - Bethany McLean and Joe Nocera The Zeroes - Randall Lane On the Brink - Henry Paulson Crash of the Titans - Greg Farrell How I Caused the Credit Crunch (novel) - Tetsuya Ishikawa (ex-Goldman worker) Mark Williams - Uncontrolled Risk Vicky Ward - Devil's Casino Chasing Goldman Sachs - Suzanne McGee And Then The Roof Caved In - David Faber Inside Job - Charles Ferguson (film) Panic - Andrew Redleaf Too Big to Fail - Andrew Ross Sorkin The Sellout - Charles Gasparino Street Fighters - Kate Kelley
"1. Synthetic products were not significant, and certainly not a significant cause of the crisis. Cash products are the ones that created excess demand for real mortgages."
--- The books that mention Synthetics, especially Tavakoli's, do not agree with this.
"2. "Gambling" is a subjective term with negative connotations. I claim that any definition of "gambling" you can post will either be far to broad, or not include asset-backed securities or their synthetic counterparts. "Investing" is usually the prefered term for risk-taking in financial products. "Gambling" usually refers to games of chance, and betting on games of skill or sports."
-- Gambling is not my phrase alone, several of these authors use the word, most notable Tavakoli and McDonald, both of whom have decades of experience in high finance. There is also a definition of gambling and speculation and how they compare to legitimate businesss activity or hedging, given in Edward Chancellors ' Devil Take the Hindmost ' -- a history of financial bubbles
"3. Synthetic CDOs are based entirely on real cashflows."
The 'flow of cash' in a CDS does not come from someone who bought a product, it comes from one counterparty who is gambling that a certain debt will never be payed off, to another counterparty, neither of which need to have any relationship, whatseover, with the debt they are betting on. This is described in Janet Tavakoli's book in great detail. Synthetic CDOs are made of CDS, thats why they are gambling.
"Second, I'm sure it's completely false that ratings agencies didn't look at the underlying loans."
Michael Lewis ver batim quotes an internal memo from ratings agencies in The Big Short, where a manager tells the workers that they do not have any underlying loan data, and that the products need to be rated anyways.
"False, but points to a truth. First, ratings are always paid by the issuer (note I didn't say "banker" since banks aren't the only issuer). Remove the words "very highly": the issuer doesn't get to pick their rating. They can haggle "
They 'haggled' by saying that if the rating agency didnt rate the bond highly enough, then the bank would go to another ratings company. This is well documented in books like The Big Short.
"I can assure you that the books were written to generate sales, rather than provide an accurate historical record"
Wow. I dont know what to tell you. If you beleive the entire industry of journalism, including hundreds of articles describing in detail the dozens of CDO frauds like ABACUS, Magnetar Capital, etc, and that its all a conspiracy theory then I guess I have nothing to argue against it.
"And so did the CDO desks that made tons of money for their companies. And I think you gave credit to the desks where it's due: "
Every thing ever written about the fall of Merill Lynch points directly to the CDO desk. The same could be said of Lehman and others. In fact, that is Goldman and Detuschebanks' defense of some of their acti
there are people with lots of savings and lots of education and lots of experienece who became unemployed, because of these games being played by others.
if they had 'put their money in the savings account', it wouldnt have helped them one iota when the economic system went into recession.
On the Brink by Henry Paulson, who was CEO of Goldman until 2006, and sec. of treasury during the crash
Too Big to Fail, Andrew Ross Sorkin
etc etc etc.
if Merrill hadn't been bought by BoA, and Morgan Stanley hadn't been bailed out by the Japanese banks, then Goldman would have fallen soon after.
Goldman got its credit default swap deals with AIG payed off, 100 cents on the dollars, when they werent even worth a fraction of that... payed off when taxpayers bailed out AIG. if AIG had gone down, goldman would have gone down, crash, explosion. none of its 'big shorts' (or 'hedges' as lloyd blankfein likes to describe it, but alot of other people dont) would have worked.
were based on credit default swaps, which are basically, gambling, and have no relationship to any actual cash flow.
and a lot of the mortgage securities were based on fraud, and the ratings agencies purposely did not even look into them to see what kind of loans they had (let alone what kind of credit default swaps they had... )
and the bankers payed them to rate this stuff very highly.
there are dozens of books about this. its fraud, not a 'mathematical mistake' or 'not understanding math'. the CDO desk bankers who made millions of bonuses on 'futurue projected profits' while they destroyed their own companies understood the math extremely well.
lets just ignore the fact that the Great Recession was directly enabled by the PHDs who turned their eyes askance at what the Gaussian Copula Function code was being used for. Not your problem right? You just make a tool, not your responsibility how others use it.
if you think that's murder simulation, well, i dont know, those are you words, not mine. i didnt mention 'murder' or 'simulation' in my original post, at all.
its not just me talking. its the government, who spends millions of dollars on... the game industry.
Slashdot Mirror
is not deterrence, it is barbarism.
the rule of law is only meaningful if you punish the guilty.
it was OK for them to loot and steal money from the general taxpayer, should they be in prison for inciting white collar crime?
and it turns out that this invasion was illegal under international law, should they be prosecuted as war criminals?
how about if someone says we should torture POWs? and we do torture POWs? are those people guilty now of war crimes?
how about if someone says we should kill all the lawyers? if some lawyer gets shot, should that person go to prison?
how about if some website is full of comments about how downloading movies and music in violation of copyright law is legitimate because the companies are evil? should those commenters all go to prison as copyright violators too?
like Lawrence McDonald (Lehman bond trader, wrote Colossal Failure of Common Sense) and Janet Tavakoli, (wrote textbooks on Structured Finance and CDOs)
the calling of 'gambling' as 'insurance' is a piece of propaganda, that goes back to the 1800s, when the "Policy Shops" sold "insurance policies" that certain lottery numbers would come up (and sold these 'policies' to people too poor to buy real lottery tickets)
the thing that makes CDS 'gambling' is that the two parties exchanging cash don't have to have any relationship, whatsoever, to the thing they are gambling on.
sometimes CDS are used as a hedge, but the vast majority of CDS in the bubble period (which were the guts of Synthetic CDOs) had nothing to do with hedging.
and most of this 'hedging' argument is used by people in positions like Llloyd Blankfein , being dragged in front of Congress to explain why his company was selling CDOs that his own people called 'crap' as though they were good investments.
are worth about as much as annual reports from, say, lehman brothers.
jesus my ears are bleeding.
and labor unions?
Team Themis was being payed, purposely, to do the kind of work that Barr was doing.
Barr's actions against anonymous were simply a logical extension of his ordinary job description. Find 'targets' who are opposed to your clients interests, and then collect intelligence on them, for purposes of character assassination.
I mean, thats what HBGary was payed to do as part of Team Themis. Not Aaron Barr, HB Gary, Berico Technologies, and Palantir Technologies.
what about the rights of people like Glenn Greenwald and others? what about the invasions of privacy committed by Team Themis and others like them? What about the leaked emails that would allegedly place Barr in the position of hacker, as he experimented with his companies own 'offensive' (as opposed to defensive) tools and practices?
fraud is not the same thing as leverage. fraud enables leverage.
and these quants enabled the fraud. while looking the other way.
if you are smart enough to figure out all of these complicated algorithms and math to model CDOs then you were smart enough to ask some basic fundmanetal questions, like 'where are the fucking loan tapes'.
in fact, some people at JP Morgan did exactly that, and thats why for a good while, JP Morgan did not get involved in any Mortgage CDOs. they knew they were crappy, risky products, incredibly overvalued.
its all in 'Fool's Gold' by Gillian Tett. . . JP Morgan actually invented the precursor to the Synthetic CDO, they called it a BISTRO and it was just a way to market Credit Default Swaps.
this shit is not complicated. fraud is not complcated. only the justifications, rationalizations, and lies that are piled on top of it are complicated.
before it started. lets take hedge fund manager Bill Ackman for example.
he was telling anyone who would listen that the Monoline insurance companies were based on fraud. they were insuring stuff they were never supposed to have insured, risky stuff, and then lying to investors about it.
what happened to him? He got investigated by the SEC. he could have gone to jail for a long time. the monolines didnt investigated, the ratings agencies didnt get investigated, the New York State Insurance regulators didnt get investigated for allowing this.... Bill Ackman got investigated.
the monolines were like mini-AIGs - they enabled the fraud of the CDO market to continue even after AIG stopped insuring certain CDOs at the end of 2005. the monolines continued, and helped push the bubble up. then they all collapsed and died in 2009 - they were too small to get bailed out. their only mistake was not being bigger.
its described in Confidence Game by Christine S Richard
the 'bullshit morality' of Ackman , well, it actually made him a lot of money.
the same for the 3 main groups in the Big Short .... they tried to warn the government about what was happening, and journalists, and they were largely ignored. their 'bullshit morality' made them a lot of money too.
of course some people dont think these 'big shorts' behaved morally..... because they profited from the crash (Yves Smith thinks they helped it... because Synth CDOs were made up of their bets (CDS))
anyways.
there were others. Janet Tavakoli in particular wrote some textbooks on CDOs , describing a lot of the fraud that was inside the business. Her 'bullshit morality' might not get her the fame and TV spots, but then again, her type of 'bullshit morality' is the foundation of all modern civilization.
and these models were the fundamental enabler of the fraud.
these models were directly linked, in a fundamental manner, to the corrupt and conflicted relationship between the banks, the ratings agencies, and the insurance companies.
the models were created by a collaboration between the ratings agencies and the banks. the banks also employed people to 'game' the models. and the banks also payed the ratings agencies based on the results of those models calculations.
it was massive, industry wide fraud at a fundamental level. without that fraud, there could have been no massive amount of bad debt pile up.
one great example of this is the story of Magnetar Capital ----- if it hadn't been for the fraud of the 2006/2007 era, then the bubble would have collapsed much, much sooner. but it kept inflating and inflating - because synthetic CDOs could continue being created and rated highly and sold to investors, based on the fraudulent use of these models.
Structured Finance and Collateralized Debt Obligations - Janet Tavakoli
Lost Trust - Lang Gibson (CDO expert who worked for Merrill Lynch)
The Trillion Dollar Meltdown - Charles R Morris
A Colossal Failure of Common Sense - Lawrence McDonald (former Lehman bond trader) and Pat Robinson
Confidence Game - Christine S Richard
EConned - Yves Smith
Diary of a Very Bad Year - Anonymous Hedge Fund Manager + Keith Gessen
The Big Short - Michael Lewis
All the Devils are Here - Bethany McLean and Joe Nocera
The Zeroes - Randall Lane
On the Brink - Henry Paulson
Crash of the Titans - Greg Farrell
How I Caused the Credit Crunch (novel) - Tetsuya Ishikawa (ex-Goldman worker)
Mark Williams - Uncontrolled Risk
Vicky Ward - Devil's Casino
Chasing Goldman Sachs - Suzanne McGee
And Then The Roof Caved In - David Faber
Inside Job - Charles Ferguson (film)
Panic - Andrew Redleaf
Too Big to Fail - Andrew Ross Sorkin
The Sellout - Charles Gasparino
Street Fighters - Kate Kelley
"1. Synthetic products were not significant, and certainly not a significant cause of the crisis. Cash products are the ones that created excess demand for real mortgages."
--- The books that mention Synthetics, especially Tavakoli's, do not agree with this.
"2. "Gambling" is a subjective term with negative connotations. I claim that any definition of "gambling" you can post will either be far to broad, or not include asset-backed securities or their synthetic counterparts. "Investing" is usually the prefered term for risk-taking in financial products. "Gambling" usually refers to games of chance, and betting on games of skill or sports."
-- Gambling is not my phrase alone, several of these authors use the word, most notable Tavakoli and McDonald, both of whom have decades of experience in high finance. There is also a definition of gambling and speculation and how they compare to legitimate businesss activity or hedging, given in Edward Chancellors ' Devil Take the Hindmost ' -- a history of financial bubbles
"3. Synthetic CDOs are based entirely on real cashflows."
The 'flow of cash' in a CDS does not come from someone who bought a product, it comes from one counterparty who is gambling that a certain debt will never be payed off, to another counterparty, neither of which need to have any relationship, whatseover, with the debt they are betting on. This is described in Janet Tavakoli's book in great detail. Synthetic CDOs are made of CDS, thats why they are gambling.
"Second, I'm sure it's completely false that ratings agencies didn't look at the underlying loans."
Michael Lewis ver batim quotes an internal memo from ratings agencies in The Big Short, where a manager tells the workers that they do not have any underlying loan data, and that the products need to be rated anyways.
"False, but points to a truth. First, ratings are always paid by the issuer (note I didn't say "banker" since banks aren't the only issuer). Remove the words "very highly": the issuer doesn't get to pick their rating. They can haggle "
They 'haggled' by saying that if the rating agency didnt rate the bond highly enough, then the bank would go to another ratings company. This is well documented in books like The Big Short.
"I can assure you that the books were written to generate sales, rather than provide an accurate historical record"
Wow. I dont know what to tell you. If you beleive the entire industry of journalism, including hundreds of articles describing in detail the dozens of CDO frauds like ABACUS, Magnetar Capital, etc, and that its all a conspiracy theory then I guess I have nothing to argue against it.
"And so did the CDO desks that made tons of money for their companies. And I think you gave credit to the desks where it's due: "
Every thing ever written about the fall of Merill Lynch points directly to the CDO desk. The same could be said of Lehman and others. In fact, that is Goldman and Detuschebanks' defense of some of their acti
i made a duplicate post without even reaidng the other follow ups
but lets not split difinitives
there are people with lots of savings and lots of education and lots of experienece who became unemployed, because of these games being played by others.
if they had 'put their money in the savings account', it wouldnt have helped them one iota when the economic system went into recession.
they were for house flipping and cash out refinancing.
and Synthetic CDOs are not based on mortgages, they are based on credit default swaps.
-reference
All the Devils are Here, Nocera and McLean
about the crisis. including
On the Brink by Henry Paulson, who was CEO of Goldman until 2006, and sec. of treasury during the crash
Too Big to Fail, Andrew Ross Sorkin
etc etc etc.
if Merrill hadn't been bought by BoA, and Morgan Stanley hadn't been bailed out by the Japanese banks, then Goldman would have fallen soon after.
Goldman got its credit default swap deals with AIG payed off, 100 cents on the dollars, when they werent even worth a fraction of that... payed off when taxpayers bailed out AIG. if AIG had gone down, goldman would have gone down, crash, explosion. none of its 'big shorts' (or 'hedges' as lloyd blankfein likes to describe it, but alot of other people dont) would have worked.
were based on credit default swaps, which are basically, gambling, and have no relationship to any actual cash flow.
and a lot of the mortgage securities were based on fraud, and the ratings agencies purposely did not even look into them to see what kind of loans they had (let alone what kind of credit default swaps they had... )
and the bankers payed them to rate this stuff very highly.
there are dozens of books about this. its fraud, not a 'mathematical mistake' or 'not understanding math'. the CDO desk bankers who made millions of bonuses on 'futurue projected profits' while they destroyed their own companies understood the math extremely well.
are the only reason that Goldman exists right now.
lets just ignore the fact that the Great Recession was directly enabled by the PHDs who turned their eyes askance at what the Gaussian Copula Function code was being used for. Not your problem right? You just make a tool, not your responsibility how others use it.
you had five kids to feed.
gonna hate.
gonna work here anymore!!! amiright?
now, hows the war on terror going? how many muslims have we converted to christianity?
we are mammals, killing is fun.
when you call it something other than what it is, though, i.e. blatant lying,
thats where you get into human territory.
if you think that's murder simulation, well, i dont know, those are you words, not mine. i didnt mention 'murder' or 'simulation' in my original post, at all.
its not just me talking. its the government, who spends millions of dollars on ... the game industry.