Charlie Rose

blue70531  12/07/2011 03:31 AM Report

The fraud on at Goldman Sachs was that the cards were marked and not more than a dozen people could read the markings. Paulsen arranged tranches according to: Liars Loans, No-Doc Loans, Missed-First-Payment Loans.

It was the ratings. The buyers thought the triple A ratings were Aces. Paulsen was valuing them according to information unavailable to the general market.

JackNesbitt  05/03/2010 07:43 AM Report

Dear Sir,

The Goldman representatives who testified this week before the Levin Committee were a singularly unimpressive bunch—including the Chm/CEO! From my time in Corporate Finance sector of the Financial Services industry, I worked with and met many more impressive people than the arrogant, condescending, and evasive bores who testified in the US Senate this week. Mediocracy ran deep in that group --from Messrs Sparks, Birbaum, Swenson, Viniar, Broderick and Blankfein through to even the “Fabulous Fab” (however, at least the “Fabulous Fab” had a bit of panache and flair and humility).

Goldman has positioned itself --a claim promulgated by its own external publicity machine and the Business Schools they recruit at, by the way --as a selective organization who prides itself on its recruiting prowess and its exclusivity. In other words, Goldman sold the financial public on the notion that it selectively recruits “Masters of the Universe”. The Goldman individuals I saw last Tuesday were about as far from Masters of the Universe as you can get—including Mr. Blankfein. (Consider the absurd statement that even Mr. Blankfein made regarding his ignorance about what rated tier of investments (AAA or whatever) certain pension funds, school districts, and foundations could buy for their own portfolios.)

In a word, then, I do not know how some or maybe all of the above-mentioned individuals ever got through their first interviews on campus or the Recruiting doors at Goldman (in the US or the UK) or even got promoted to the next level. I would not hire anyone of them for even a dogcatcher position except for maybe the “Fabulous Fab” who might be good with customers and new business.

Jack Nesbitt, MBA and Recruiter

& former Corporate Finance Associate, First Chicago Capital Markets, Chicago, IL

Welwyn, Herts, England, UK and Jacksonville, Fla, USA

vinvestor  04/28/2010 10:07 PM Report

The discussion above was an interesting one, however it leaves more questions than answers

-Should a market maker also be a market participant?And, if it is a market participant should it knowingly take positions adverse to a client?

-If Goldman is just a market maker and it has shown all deal aspects to the buyer except the Paulson case and the client wanted a product like that did Goldman commit any crime?

-If a financial product is created, should it have underlying social utility , or is it ok if it does not seem to have any social benefit?

-What is the right organization and incentive structure to make sure the people involved in these transactions take measured and rational bets only?

-How can systemic risks be avoided in future?

-If a firm on the other side benefits from the trade and the losing side is tax payer supported, should the winning side be asked to pay a windfall tax for its profits i.e. should goldman, paulson etc pay a windfall tax?

We definitely live in interesting times as the old Chinese curse goes

HCSKnight  04/26/2010 12:23 AM Report

Michael Lewis is so biased, I am glad I didnt waste my money on his book...

One truth rises above all others, the public is getting a full on storm of lies created to feed their anger and keep their eyes off of the real problem and failure; the politicians and regulators doing their job.

How come NOBODY is talking about the Government Motors company lying in an advertisement about paying back "in full" the bailout money? WTH!

Granted the kid who made the CDS' is an @sshole, and of low moral character. But, seriously, what is any bank doing working such large deals with a 28 year old kid? Right there one should question the intelligence of the client.

The more I listen to the facts and assertions, the more I think GS is simply the best and we are now seeing a bunch of low character opportunists trying to go after the firm. And Michael Lewis comes off like an archetype....

doodahdaze  04/24/2010 08:07 AM Report

Wells Fargo a.k.a. 'First Union'. The original crooks.

robdverity  04/23/2010 11:53 PM Report

A blanket indictment of the following CEOs to be tried for fraud and malfeasance (or crimes against humanity) at a minimum is sorely needed to regain trust throughout our financial institutions: Ken Chenault, American Express; Ken Lewis, Bank of America; Robert Kelly, Bank of New York Mellon; Vikram Pandit, Citigroup; John Koskinen, Freddie Mac, Lloyd Blankfein, Goldman Sachs; Jamie Dimon, JPMorgan Chase; John Mack, Morgan Stanley; Rick Waddell, Northern Trust; James Rohr, PNC; Ronald Logue, State Street; Richard Davis, US Bank; and John Stumpf, Wells Fargo.

If you bank at any of these you are being unpatriotic. Switch to a small local bank.

CarbonFoil  04/23/2010 01:54 PM Report

I agree with robdverity. Profuse apologies and excuses by captains of the so-called 'financial industry' do not substitute for real accountability. The ruling class is determined to keep the flow of wealth distribution upward.

As Eisenhower predicted, the 'national security' behemoth and private military contractors take the biggest piece of the taxpayer pie with hardly any 'mainstream' commentary or critique. This glaring omission can also be found at Tea Party rallies, rendering them useless. Those who do stand up for taxpayers against the M-I complex are branded 'weak on defense' and marginalized quickly. Even if you believe that the portion of the national defense budget is appropriate, there is still an enormous amount of waste to be found, as Winslow Wheeler has documented extensively.

Now we're hearing that 'entitlement spending' needs to be addressed, as though Social Security is the root of our deficit problem. Don't believe it. Taxpayer money will continue to flow to the military sinkhole, as bailout money already has to the banks. These are the real constituencies of the ruling class, and they must be addressed.

"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron."

–Dwight D. Eisenhower

robdverity  04/23/2010 01:02 AM Report

That's what makes markets. I liked "Too Big to Fail." I liked the tidbit re Hank and Wendy Paulson's shine to an island - so whammo - they bought it. So what?

Well I refer you to yourself. You say, "However I do agree on one thing..we taxpayers should not be responsible for bailing out failing or failed firms,

...."

Paulson (ex GS) pulled the biggest heist in history (with or w/o a gun), initially with three typed pages. Chutzpah and inept pols brought about the first of serial moral hazards.

Your touting of the bottom line as the be-all-and-end-all mission of banks is exactly the anything goes attitude that precipitated the collapse. The fabrication of half-baked derivatives based on NINJA loans was egregiously callous and cynical; compounded by the concomitant manipulation of the rating agencies. All too clever by fractions.

The 'ponzi-like bubble intent' regardless of repercussions was and is unforgivable. The wise-guys had to know the ultimate outcome. If not they shouldn't be in charge.

They're all duplicit, complicit scumbags that should be tried, fined commensurately, and incarcerated real time. These aren't harmless children. They have wreaked real damage world wide.

The fact that they are being rewarded and asked to help with the mess they created shows how sick we are as a culture.

Your giving them a free-pass on their egregious greed merely adds to our disease. Buck fever.

DavLev  04/22/2010 11:56 PM Report

Look folks, bashing Wall Street, which has allowed trillions

in purchases by US, (everthing from homes to businesses, etc.), is undermining our entire economy. Reading "Too Big to Fail", I was not impressed. Talk about verbose. It read like something out of a Payton Place book. Who cares about

the personal lives of the participants in the several complicated schemes. I don't.

I had to skip 80% of the material to get anything out of the book. And even then, who cares?

Banks, investment houses, etc., are there to make money.

The bottom line, there, like everywhere else is what counts.

However I do agree on one thing..we taxpayers should not

be responsible for bailing out failing or failed firms,

including GM and Chrysler. Perhaps the govt should look

at every industry to repair, that needs repairing.

One acquaintence argues that GM paid far more in taxes over the decades than the bail-out. These taxes allowed those

receiving the benefits, to buy their cars guy.

Why not extend bail-outs to steel, US newspapers, failed

radio stations, garment manufacturers and restaurants, I ask?

Even the gentlemen interviewed admitted that perhaps no crime has been committed. It's really a witch hunt by the otherwise inept SEC., whose staffing are 3rd rate business and law school graduates.

If they had any intelligence, they would not be working for the SEC.

It's like teachers. Those that can do. Those that cannot,

teach. And they too have a rough rode, with 10% leaving yearly for greener pastures and others worried that pay will depend on their student's achievement ( based on test scores).

Admittedly I was a superior student in high school. I knew

that reading past regent's exams held me in good stead.

But making a simple piece of furniture in shop, forget it.

robdverity  04/22/2010 11:40 PM Report

Agree Bobbie. Boies was skin crawling lawyerlie creepy. He'd pluck the nichols from a dead man's eyes or worse so long as it was legal.

He, Larry Summers, Bobby Rubin should all be condemned to living with honesty, integrity and statesmanship - kicking and screaming of course. Scumbags!!!

doodahdaze  04/22/2010 09:00 PM Report

Goldman Suchs (that's Sucks with an h).

Catchy name. I think they should go with it.

Bobbie  04/22/2010 07:15 PM Report

Charlie, on the program about Goldman Sachs, repeatedly asked if GS behavior was wrong. Boies repeated "legal..." Charlie should be asking if GS behavior was "morally wrong"

robdverity  04/22/2010 04:10 PM Report

CR will soft peddle this probe going forward. Why? His boss Mayor Bloomberg has taken the side of the NY Big Banks. Softball interviews, queries placating his biggest sponsor.

"The bashing of Wall Street is something that should worry everybody." Bloomberg declared last week. [USA Today, AP, 4/22/10.] "We're on their side."

So Charlie damn well better be as well.

The bashing worries me because it's too timid. When they heavily fine, suspend them from the industry, and yea even incarcerate (say 13 of 20 largest) then my worries will abate somewhat (not cease). They flushed the world's finance and stay loose? And (most egregious of all) they are totally disdainful of my utter contempt for the whole lot. Now that should be the eighth mortal sin.

robdverity  04/22/2010 01:49 AM Report

Well said 4some. U sound as pissed as a lot of us.

Anarchy's the only answer. The top 1% declared class warfare. We need to answer their call. Go grab a tomato and pick a target. A limosine, a yacht, a ....

liberty4some  04/21/2010 11:47 PM Report

Dem vs. Rep. you all need to get over it. The wealthy control everything. Any business or investor that doesn't have enough money to carry them through several bad years shouldn't be investing.

Derivatives are gambling and nothing less. How is permitted that Billions of dollars were placed as a "derivative" bet as to whether or not Greece would be able to pay back their debt. Then low and behold someone was there to help them out. If Americans don't wake up and realize that the longer we get stuck on Dems vs. Rep. we will continue to stay right where we are at.

We get caught up in the propaganda and don't search for the truth ourselves. We don't hold anyone accountable for ANYTHING. Nothing has ever come out of governmental hearings...why would that change.

We are the country that spent a trillion dollars because we were so concerned about the Iraqi people. When the truth is we could care less about those people. Millions are still in tent camps are not allowed to leave. We are all talk. - even the Tea Party. They demand the same things that people have been demanding for years. I do give them credit for getting together (although the average Tea Party member is white, well-off, older, and can take the time to make this their current hobby). But if I was in the service I would be greatly offended that no one banded together to stop the war yet was getting together over taxes.

When you buy into the propaganda you already lost the game. This game hasn't changed throughout history - the mega wealthy pull the strings and it doesn't matter what political party you belong to but rather whom you know.

War, human trafficking, child molestation, Americans living in poverty, public education compared to private (not charter but boarding schools)...these are issues we should be talking about each and every day.

We need to hold people accountable and not let our government put medals on their friends that fail us. Why can’t I gamble on the NFL game but millionaires can gamble on Greece? There is no difference. And until we demand that this practice stops we will see pensions drop, benefits cut, and more bailouts.

Derivatives are illegal gambling. Take this toy away from the big dealers.

robdverity  04/21/2010 05:15 PM Report

Loved Michael Lewis's ingenuous exuberance, even tho it's assuredly unfounded. Obama's circle (Summers, Geithner, Rubin et al) aren't going to promote the SEC probe beyond an ultimately affirming (for G. Sachs) tokenism. They will be reigned in sooner than later.

From the book 13 Bankers, Brooksley Born, head of the Commodities Futures Trading, floated a concept paper to regulate derivatives; Summers called her and said, "I have 13 bankers in my office, and they say if you go forward with this you will cause the biggest financial crisis since WWII."

Obama's was bought and sold before he took his oath. The financial and MI oligarchies have him by the short hairs, which is made the sadder by the fact he could have been so much more.

doodahdaze  04/21/2010 02:04 PM Report

This was a great C.R. episode; I learned a lot.

doodahdaze  04/21/2010 01:55 PM Report

REMant, Most of what you say flys right over my head. But when you hit bullseyes, they are stokes of genius.

your first paragragh, right on target.

your second paragraph,.. ehhh

So I have to give you a C on this one.

Keep at it, you'll get it perfect someday. ;)

REMant  04/21/2010 01:33 PM Report

I think this kind of trading operation can be likened to the 20's pools, which Goldman engaged in then, and if not precisely illegal under present law, there is a clear possibility that it will be when a jury gets finished with it. Personally I would consider it akin to that sort of insider trading, and not unlike the kind of warfare banks and stock manipulators had engaged in from the early 19th c. A direct result of eliminating Glass-Steagall, I'd say. It seems to me that the one thing all businesses these days try to do is to set up a moat (if you will) of opacity, and try to manipulate public opinion concerning their products, something the politicians seem to have taken up with enthusiasm. They like to call this mkt making and is what larger firms do. If they get away with it they are applauded for their acumen, but if they do not, they are considered crass monopolizers. Derivatives are indeed gambling, from one point of view, but from another are part of a process of decision about the course the future should take, like any market can be viewed. Those who do not want to engage in such speculation either think such activity if meaningless, like gambling, or believe it is best to wait, gather evidence and then make a decision. But certainly derivatives are more like gambling when the mkt for them is opaque than when it is transparent.

I don't know where Lewis and Sorkin get their information about what Republican senators have been trying to do, and this strikes me as Democratic propaganda, not unlike the healthcare campaign. If any party has been supporting the banks it has been the Democrats. As I wrote yesterday, the Dems want to regulate everything but leave monetarism running full tilt. It seems to me they have rather belatedly been forced to agree that reserves should be increased. That, and the action brought against Goldman, I would think is what has brought a more conciliatory tone from the GOP. I see today that the Post has concluded that, too. It seems to me that the Republicans have long held a position like Volcker's and sounded like the "Tea Party," tho I recognize that pockets of monetarism remain among them.

dax06  04/21/2010 12:21 PM Report

I feel like my Cohort group got shafted by these actions. I am 30 now, have 3 properties in foreclosure proceedings, and read a lot about investing, which always conveyed that real estate was a secure investment. And more, always read that the proper way to invest was by sin OPM. I feel like my cohort group has been prey for wall street predators. Please have a show regarding what the American dream means presently when the older tribes prey on the younger citizens of the republic. Dax, Miami, second generation Latin american.