"A Few Good Bond Traders"
Another one bouncing around trading desks:
"Son, we live in a world that has bonds and those bonds need to be bought by men with balance sheets. Who's gonna do it? You? You, Lieutenant Fuld?
I have a greater responsibility than you can possibly fathom. You weep for Bear Sterns and curse the short sellers; you have that luxury. You have the luxury of not knowing what I know: that Lehman's death, while tragic, probably saved firms and that my existence, while grotesque and incomprehensible to you, saves markets.
You don't want the truth because deep down in places you don't talk about at parties you want me buying bonds, you need me buying bonds. We use words like TSLF, PDLF, Super SIV. We use them as the backbone of a life trying to defend something. You use them as a punchline.
I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom I provide and then questions the manner in which I provide it. I would rather you just said "thank you," and went on your way. Otherwise, I suggest that you pick a sub-prime option arm bond and pay par.
Either way, I don't give a damn what you think you are entitled to."
Wednesday, September 24, 2008 | 04:21 PM | Permalink
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Comments
McCain and the Republicans are in an interesting position with regard to Paulson’s bailout.
It would seem that the best thing for them would be to publicly oppose it, but at the same time, to hope like hell that it passes anyway.
Posted by: DL | Sep 24, 2008 4:25:20 PM
Classic!
Posted by: Steve | Sep 24, 2008 4:26:50 PM
EXCELLENT. so sick of hearing how main street doesn't understand wall street. main street is reacting irrationally because they are scared. nonsense. main street understands the charade, too well.
Posted by: cloudy | Sep 24, 2008 4:30:07 PM
We are all subprime now!
James.
____________________
DJ US Rep Frank: Need Tax Relief For Bks Who Hold GSE Shares
By Michael R. Crittenden
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--U.S. lawmakers and the Bush administration should consider providing tax relief to community banks who hold millions of dollars in preferred shares of now government-controlled Fannie Mae (FNM) and Freddie Mac (FRE), a top Democrat said Wednesday.
House Financial Services Chairman Barney Frank, D-Mass., speaking at a hearing with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, said he was worried that the government takeover of the two firms could adversely affect smaller banks.
Specifically, he raised the concern that the tax treatment of Fannie and Freddie preferred shares held by the banks could hurt the financial conditions of smaller institutions because the shares will be devalued by the government's decision to take the reins of the firms.
"There is a danger that community banks will be victimized," Frank said.
Bernanke noted that federal banking regulators have already said they plan to be flexible and work with community banks and other institutions that held the preferred shares.
-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=PJeHmS4lRrSS53ZpCwJJZg%3D%3D. You can use this link on the day this article is published and the following day.
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2008 15:15 ET (19:15 GMT)
Copyright (c) 2008 Dow Jones & Company, Inc.- - 03 15 PM EDT 09-24-08
Posted by: JimmyY | Sep 24, 2008 4:38:32 PM
Did Gary Ackerman just say "Little Orphan Fannie"??? Oh, I just love dirty old men....
btw, I tried for years to get the anim rights, but to no avail....
Posted by: fatbear | Sep 24, 2008 4:39:57 PM
My new career plan is to re-classify my business as a "commercial bank". There, done. I'm an instant millionaire.
Thanks Hank & Ben!
Posted by: Jeff M. | Sep 24, 2008 4:41:21 PM
Movie analogies are uncannily apropos at times. Remember in Forbidden Planet, the Krel had risen to such glorious heights of technology and ethics that they were able to build a machine that would instantly create and shape matter according to the thoughts of any Krel mind. However, their hubris had blinded them to their one weakness, the "mindless primitive" within their "id". Their pride prevented them from seeing what they had ascended from.
In the same fashion the titans of Wall Street, with the support of the Congress and several Presidents, built a titanic leveraged derivative machine, forgetting the basic principles of debt and leverage that would be their undoing, as they had been the undoing of so many before them.
So, as the Krel turned on their God machine and it wound up destroying them in "one night", as every evil and twisted subconcious thought from their id was let loose in the form of unstoppable monsters, in the same way the leveraged derivative machine was turned up to maximum, and once turned up, could not be turned off, until at the very end it exploded and destroyed everyone holding all their assets in dollars. dc.
Posted by: dc | Sep 24, 2008 4:41:46 PM
for now, we do have the 2nd amendment, the right to bear arms. Let's see some of these ex-ceos in jail pronto. They can waive the 5 day period for converting GS and MS to banks, they can throw the bastards in jail in Gitmo.
Posted by: cloudy | Sep 24, 2008 4:45:48 PM
Remember in Forbidden Planet
Ah, Shakespeare.... I saw Mandy Patinkin last night in The Tempest at CSC on 13th St - good cast, great show - a better Prospero than Walter P in Forbidden Planet, and no Krel - remember the theme is forgiveness, so I guess we should give Ben, Hank & Alan a free ride to Naples, as long as they give us Milan
Posted by: fatbear | Sep 24, 2008 4:49:30 PM
Ah, it becomes much clearer now. Somebody ordered a "code red" on the housing market.
Posted by: Rick Schaut | Sep 24, 2008 4:52:58 PM
this $700 billion is going down a black hole. some people say that taxpayers will profit because these bonds/debt/derivatives are being purchase at a discount. but doesn't housing prices have to recover to 2006 levels for this debt to be back at par? look at any bubble, prices take decades to recover. the nasdaq will hit 5000 before housing values go back up to 2006 levels.
Posted by: hue | Sep 24, 2008 4:56:03 PM
I have faith in the government.
Faith that bureaucratic inertia and political posturing will delay and scale down the bailout.
Faith that euthanizing overextended companies will foster responsible business growth.
Let Harvard, Yale, Stanford and the rest bail out their alumni since they create citizens/politicians/businessmen that are worth such princely sums.
Public servants serve you and me. It seems that our servants forgot their duties and need to be fired.
Though I tend to vote Republican, I am tired of all the nonsense created by politicians(both sides) and the laziness of the general public. That being said, I do not see Obama's spending being any less than that of Bush, thus he does not get my vote.
Adult humans usually learn lessons the hard way. Those people who choose ignorance will be taught a lesson about opportunity cost.
Bring on the depression/recession and let us excise the fluff from our economy. Reset our collective values to free ourselves from our spoiled lifestyle and set us up for future success.
" You know you got to go through hell
before you get to heaven"
Steve Miller, Jet Airliner
Peace out Vatos...
Posted by: John Wellman | Sep 24, 2008 4:58:59 PM
"Morbius, something is approaching from the southwest.
It is quite close now."
Monsters from the id.
Amazing film for its era.
One of J. Bradford deLongs favorites.
Who would have ever thought it.
Posted by: esb | Sep 24, 2008 4:59:06 PM
I know, it is simplistic but it has to be said: "they are just throwing good money after bad." Or should I say they are just throwing the people who buy our T-bonds after bad? My guess in todays world the "good ole U.S.A might not seem as good and the Euro, or Japan might look a whole of alot better. Fellow Americans the time has come for us to realize that we have nothing to fear accept reality!
Posted by: JustinTheSkeptic | Sep 24, 2008 5:00:29 PM
How do we get out of this mess...click your shoes three times and then you'll be taken to a place called PaulsonBernakeville...
Posted by: JustinTheSkeptic | Sep 24, 2008 5:03:39 PM
I have faith in the government.
Faith that bureaucratic inertia and political posturing will delay and scale down the bailout.
Faith that euthanizing overextended companies will foster responsible business growth.
Let Harvard, Yale, Stanford and the rest bail out their alumni since they create citizens/politicians/businessmen that are worth such princely sums.
Public servants serve you and me. It seems that our servants forgot their duties and need to be fired.
Though I tend to vote Republican, I am tired of all the nonsense created by politicians(both sides) and the laziness of the general public. That being said, I do not see Obama's spending being any less than that of Bush, thus he does not get my vote.
Adult humans usually learn lessons the hard way. Those people who choose ignorance will be taught a lesson about opportunity cost.
Bring on the depression/recession and let us excise the fluff from our economy. Reset our collective values to free ourselves from our spoiled lifestyle and set us up for future success.
" You know you got to go through hell
before you get to heaven"
Steve Miller, Jet Airliner
Peace out Vatos...
Posted by: John Wellman | Sep 24, 2008 5:04:01 PM
sorry about the double post...I have some fat fingers today
Posted by: John Wellman | Sep 24, 2008 5:16:42 PM
OK, some people might get mad at me for my last statements and in some regards I wish I could face the world all hunky-dory like you A-types, but the fact of the matter big brothers and sisters sometimes only time can heal the wounds. What needs to happen is to let the "market mechnism," work. It's not as dire as you suspect...so there will be a few new names on Wall-Street. In a way wouldn't that be nice. Instead of JP Morgan, and let's see some guy named Mellon...maybe Istela Boobompler and Sunman Who...isn't that what free-markets are suppose to create - new businesses that are lean and mean? Why are we letting the same old families keep the jewels? Mix it up America!
Posted by: JustinTheSkeptic | Sep 24, 2008 5:21:52 PM
Forget it, Barry. It's Chinatown.
Posted by: Mark | Sep 24, 2008 5:34:36 PM
A great Jack Nicholson spin off.
But if I may remind people, that was also the speach that convicted him.
Posted by: flash91 | Sep 24, 2008 5:48:15 PM
Hilarious, thank you.
Posted by: Ori | Sep 24, 2008 5:50:38 PM
We are descending into fantasyland, with movie references betraying our cultural bedrock ...
That said, I can't want until someone dubs the words from "A Few Good Bond Traders" into the pertinent Jack Nicholson soliloquy from "A Few Good Men", ending with ...
THE DEBT? YOU WANT THE DEBT?
YOU CAN'T HANDLE THE DEBT !!!!
I'm looking to see it on YouTube any second now.
Posted by: constantnormal | Sep 24, 2008 6:17:05 PM
You are all forgetting what got Jack into the nuthouse in the first place:
"Between you and me, uh, she might have been fifteen, but when you get that little red beaver right up there in front of you, I don't think it's crazy at all and I don't think you do either. No man alive could resist that..."
That's right, the yield for stretch (pants).
Posted by: Winston Munn | Sep 24, 2008 6:53:57 PM
A Wall Street Morality Play
At the "21 Club" in Manhattan a couple of Masters of the Universe and Hank Paulson discuss the days' issues.
Master of the Universe 1: Hank Paulson! Old pal, joins us over here.
Master of the Universe 2: Ole Hank, looking good! So the new gig keeping you busy? (chuckle)
Hank Paulson: You know it guys. I'm the big swingin' macher in DC now.
M1: Say, Hank what do you make now, 400K?
M2: 400K! I took more than that out of my stool this morning.
M1: Bwahahahaha
Believe me, they really talk like this. I've been there.
H: Yeah, but I have the biggest wallet in the universe. How's your cashflow lately?
M1: Um, say Hank, about that..
M2: Yeah, we were thinking that you could, you know, take this crapola off our hands.
M1: At face value.
M2: Right, market value would kill us now, we'd be taking a huge beating.
M1: Major haircut.
H: Hey guys, this is the taxpayers' money we're talking about here.
M1: Bwahahahahaha!
M2: Bwahahahahaha!
H: Bwahahahahaha!
M1: Oh, God! Hank, you are too much! It's still funny when you do that "taxpayers' money" schtick.
M2: Oh! Laughing too hard. Can't breathe. I'll need another Benjamin to wipe the tears. Look, you made me spill my single malt!
H: Not a problem, I'm buying. Oh, boy! Another round for me and my friends.
M1: We were hoping you'd say that.
M2 Yeah.
H: I'm buying 'til the storm blows over.
M1: Whatta guy.
M2: Always liked you, Hank.
THE END
Posted by: Big Chief | Sep 24, 2008 6:54:53 PM
Interesting interview with Martin Feldstein just aired on BNN in Canada. The money quote (literally) for me was his comment:
"$700 Billion won't get enough toxic assets off the balance sheets to get banks to trust each other enough..."
When pressed as to what it would take for this to happen he had no answer.
My takeaway was $700 billion is but chapter 1 of a more expensive saga...
Posted by: shadow | Sep 24, 2008 7:03:35 PM
