New Book by a former CDO Structurer: "How I Caused the Credit Crunch"

[Lucky Luciano]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8m7w1GaO39s

April 10 (Bloomberg) -- Tetsuya Ishikawa is a tease.

A Gen-X banker whose CV lists jobs at Goldman Sachs Group Inc. and Morgan Stanley, he has written what sounds like a confessional memoir, “How I Caused the Credit Crunch.”

Don’t be fooled. This “insider’s story” is cast as a novel about a London banker named Andrew Dover -- a fresh-faced rake whose progress is littered with lap dancers, guzzled Cristal and one particularly tacky tryst over an office printer.

Is the story fact -- or fiction? Any resemblance to actual people or firms is coincidental, Ishikawa says. Then he adds this double negative: “That is not to say that the individual events in this book didn’t happen.” I anticipate brisk sales in London’s financial district, the City, when the book hits the stores next week.

Ishikawa, 30, grew up in London, was educated at Eton and Oxford, and began his banking career in 2002, says his publisher, Icon Books Ltd. His claim to fame: He structured, syndicated and sold collateralized debt obligations and other credit instruments -- the products that dragged us into the worst financial crisis since the Great Depression.

By 2005, he had worked his way up to Goldman Sachs, says a biographical sketch provided by Icon; two years later, he jumped to Morgan Stanley. After the bubble popped, Morgan Stanley let him go with what Icon calls a “high six-figure compensation package.” It was May 2008.

--SNIP--

[closeupready]

1. There really is no mystery to this, so I doubt this book will sell.

In a big game of "see no evil, speak no evil, hear no evil," they were all packaging up bullshit, covered it in gold leaf, and sold it to institutional investors. That simple. End of story.

[Lucky Luciano]

2. Not as simple as that. I bet many of the people, including the author,

who was still under thirty, was naive enough to think that he was providing a good investment - afterall, a lot of the young people never experienced a serious recession or depression - this makes them too optimistic. When the shit hit the fan, he became much less naive and found out that his models were all crap...as for the senior executives that pushed this crap...well it is harder for them to shield themselves as naive.

[closeupready]

4. Okay, yes, I can go with that, that most of the younger people were just

cogs in this late 90's, early 2000's deal-machine, and the majority of older people implicitly knew what they were doing was not kosher, but none of them put the brakes on it because 1) it was making them rich; and 2) nobody had any right to stop them.

[Lucky Luciano]

7. Funny you say that...

One top exec at Lehman was let go before the implosion when he suggested getting out of the mortgage business...he was rehired after the crash by a pretty sheepish Dick Fuld - and I must assume that he was paid a handsome CASH signing bonus after the insult he endured while being 1000% correct...of course, by then it was too late and Lehman went down a few months later.

Goldman was prescient enough to close their mortgage positions in 2007 and actually get heavily short. They made a killing on the way up and on the way down...but even they became victims once Lehman went under since Lehmans BK killed the short term funding market that was the blood that Goldman required to stay alive. The market crash also hurt Goldman's exposure to private equity (they had to mark the private equity on their books down pretty hard) and leveraged loans. Now Goldman is looking a lot better and they report earnings on April 14th - don't be surprised if they report much better than expected earnings which will support a $5-10B equity offering by Goldman that will be used to pay back their TARP money so that they will free and clear of government oversight of bonuses.

[pretzel4gore]

3. bush caused it....

since the beginning, it has bin a fight to fini betweeen truth and lies, good and the rot, the decent and the pricks....with the proviso that the corrupt had no rules limiting them, unlike the honest feller. In our day, the evil is represented by the greedy racist conman tapeworm who, well, murdered JFK, brought down the Soviet Union and have undermined even the hope that any mainstream news/info organ might ever tell truth. They can't, cuz the herd, the freeper cum loudmouth redneck toby kieth type rambo final solutionist would tear the pig to bits, and right out in the open. The pig knows - he don't fear US, who he knows are onto his pig FUKKS, but his own support base, which is sorta clueing in now... ie: A FOOL and HIS FUTURE ARE EASILY PARTED!
Geez can't we just sit back and enjoy it?

[closeupready]

5. The CDO mania started before Bush took office though.

n/t

[pretzel4gore]

6. prescot bush was funding hitler nazis back in the 30's

perhaps i see patterns too much, but it seems if you take the plotted coup against Roosevelt (derailed by Smedley Butler) and all the rest of the stuff the media just pretends never happened, then one can see junyer's elevation as part of a long term defrauding of the PEOPLE, with 'the tragedy of the commons' a backdrop for the pig to hide hisself in. Bush himself is less a factor then reagan, who, remember bragged he'd never read an entire book from start to finish....

[Fovea]

8. Banks evolved to serve the private needs of Kings

and wealthy traders.

Nowhere were our interested considered.

Perhaps we need to go back to burying gold in the backyard.

[anigbrowl]

9. You see patterns too much

I've worked with a lot of traders. You can't engineer a giant decades-long conspiracy as you suggest if it's genuinely senseless. This crash happened because a lot of people saw ways of making relatively easy money that kept working for a long, long time, and their collective greed outpaced their collective wisdom.

Many, perhaps most, big historical villains are opportunists rather than engineers. That tendency may run in the Bush family, but don't mix up correlation with causation. If you believed everything written on DU then you'd have to think W was living in an underground bunker in Panama now.

[Lucky Luciano]

10. Yay!!!

Someone who gets it!!!

:applause:

[pretzel4gore]

11. let's err on the side of Lady Guillotine

it drive me mad to watch 'the fog of war' and see mcnamara say 'the 4.3 million Vietnamese deaths in the war' when the 'war' wasn't a real war but a conjob carried out defrauding the American people, who lost 58 thousand men and how much money? And same with Iraq. The 'pig' is a pig because, unlike the noble beast, the pig is devoid of all justification for his excesses, which are carried out only to create misery, and loss, while adding maybe a penny to their mountain of accrued wealth/power. Maybe over-stating others guilt just makes all contentions suspect, but....we are living on a dying planet, members of a doomed species, and there is a God who knows exactly how evil them lying bastards were and are, on purpose, unless their ignorance excuses them... Let the Lady get to work...

[Lucky Luciano]

12. Wow...I would hate to live in your mind...

While it is clear that Vietnam and Iraq are illegal horrors that have been committed in our name, your reply above is quite analagous to the following converation:

Person A: Hey B! How is it going? Did you read that book I was telling you about?

Person B: Well, the weather is quite nice except for the in the southeast where there have been some tornadoes.


A total disconnect in the conversation with the reply having no correlation to the prvious conversation.

[pretzel4gore]

13. I didn't mean to derail the topic

your OP implies that the fraudulence was personal, private, and mainly the result of some guy's individual initiative; and in a certain way, that is true. But the larger issue, society's almost insane corruption, and the hapless diffidence of the nation's overseers who must constantly be defending the economy from potential disaster even while the reactionarkys attack Obama, who leads the government.... (?)
life would be easier if we all just drank the koolaid and laid down for a nap...i agree, but....but....but