williambanzai7

Goldman and Morgan as Bank Holding Companies

How The Grinch Almost Killed Wall Street
(How the Grinch Stole Christmas revised by
William Banzai7)
williambanzai7.blogspo.../

Every Banker down on Wall Street Liked CDOS a lot...
But the Grinch,Who lived just north in Greenwich, Did NOT!
The Grinch hated those investment bankers for a whole list of reasons!
Now, that is why we are having this exciting fall season.
It could be his trader head was screwed on just right.
It could be, perhaps, that his white shoes were a little too tight.
But I think that the most likely reason of all,
May have been that his NAV was 12 sizes too small.
Whatever the reason, His smarts or his shoes,
He stood there last week, hating all Wall Street's Whose Whos,
Staring down at his trading NAV with a sour, Grinchy frown,
Detesting those warm lighted screens in Wall Street town.
For he knew every Captain down in Wall Street beneath,
Was busy now, trying to sail through the great Subprime reef.
"And they're firing their traders" he snarled with a sneer,
"In three months its Christmas! It's practically here!"
Then he growled, with his Grinch fingers nervously drumming,
"I MUST find some way to give those investment bankers a drubbing!"
For Tomorrow, he knew, all the Whose Who of Bankers,
Would wake bright and early. And rush to save all their bonus earnings!
And then! Oh, the noise! Oh, the Noise!
Noise! Noise! Noise!
That's one thing he hated! The NOISE!
NOISE! NOISE! NOISE!
Then the Whose Whos, young and old, would all fly Far East.
And they'd try to talk Korea and China into feasting on trading book yeast!
And they'd feast! And they'd FEAST!
FEAST! FEAST! FEAST!
They would feast on champagne and rare banker roast beast.
Which was something the Grinch couldn't stand in the least!
And THEN They'd do something He liked least of all!
Every Who down in Wall Street, the Bulls and the Bears,
Would stand close together, with opening bells ringing.
They'd stand hand-in-hand. And the Whos would start singing!
They'd sing! And they'd sing! And they'd SING!
SING! SING! SING!
And the more the Grinch thought of this Singing,
The more the Grinch thought, "I must stop this whole thing!"
"Why, for year after year I've put up with it now!"
"I MUST stop a Wall Street bailout from coming! But HOW?"
Then he got an idea! An awful idea!
THE GRINCH GOT A WONDERFUL, AWFUL IDEA!
"I know just what to do!" The Grinch laughed in his throat.
And he made a some quick calls to spread rumours of unkown CDS stew.
And he chuckled, and clucked, "What a great short seller trick!"
"With this phone and this screen, I'll batter those Wall Street Dicks!"

"PoohPooh to the Whose Whos!" he was grinchishly humming.
"They're finding out now that no Chinese Knight is coming!"
"They're just waking up! I know just what they'll do!"
"Their mouths will hang open a minute or two,
Then the Whos down in Wall Street will all cry BooHoo!"
"That's a noise," grinned the Grinch, "That I simply MUST hear!"
So he paused. And the Grinch put his hand to his ear.
And he did hear noises over the trading screen glow.
It started low. Then it started to grow.
But the sound wasn't sad! Why, this sound sounded merry!
It couldn't be so! But it WAS merry! VERY!
He stared down at Bloomberg and Reuters! The Grinch popped his eyes!
Then he shook! What he saw was a shocking surprise!
Every banker down in Wall Street, the longs and the shorts,
Was singing! Without any White Knight at all!
He HADN'T seen a Big Wall Street bailout coming! IT CAME!
Somehow or other, it came!
And the Grinch, stood puzzling and puzzling: "How could it be so?"
"It came with out tickers! It came without a tab!"
"It came as Federal largesse in boxes and bags!"
And he puzzled three hours, till his puzzler was sore.
Then the Grinch thought of something he hadn't before!
"Maybe a Bailout," he thought, "is not just for financial Whooers"
"Maybe Fed bailout...perhaps...me... a little bit more!"
And what happened then? Well...on Greenwich Main Street they say,
That the Grinch's taxes grew 12 sizes that day!
And the minute his wallet didn't feel quite so tight,
He whizzed with his Lexus through the South Bronx morning light,
And he met those Wall Street boys for a Smith & Wolensky feast!
And he, HE HIMSELF! The Grinch carved the beef!

Morgan Stanley Shorts Brought the Short Ban

The Great Subprime “Babel”—A Modern Tale of Biblical Greed

By WilliamBanzai7

Wall Street never changes. The pockets change, the suckers change, the stocks change, but Wall Street never changes because human nature never changes. - Jesse Livermore

The public’s annual loss to Wall Street has usually been estimated in former years at $100,000,000 per annum, but owing to the more recent enterprising methods of the “Street” in manipulating the game, this estimate is now far to small as we shall see.-Franklin Keyes (1904)

Conceit of the Street

Shortly after the explosion of the great “dot.com” bubble something happened that was to change the monetary affairs of all men on Earth.
The investment banking tribes had once again begun to proliferate and fill the Street. They spoke a new tongue--the tongue of rampant financial innovation. It was a strange tongue with words like synthetic CDOs, conduiting, CLOs, SIVs, bespoke swaps, CDOs squared, negative default correlations, binomial expansions and stochastic modeling. A tongue curiously reminiscent of the tongue of the House of ENRON.

The generations of bankers before the “dot.com” bubble, were believers in the fundamental laws of securities valuation and diversification. They were believers in the book of Graham and Dodd.

But the new generation of investment bankers was different. They stressed an opposite code of investing. The smart investor did not count. Their game was a vast pyramid of derivatives and mortgage backed securities. Had they confined themselves to this kind of financial life in a modest fashion, all might have been well. But the obscene fee income made possible by cheap leverage, financial engineering and securitization techniques made them ever greedier and in their hubris they thought they could beat the financial laws of thermodynamics.

They decided to build a great Tower of mortgage backed securities. With the Tower they would pillage the housing markets and at the same time seemingly eliminate all risk for themselves. Heads we win, tails you lose; that was their credo. The symbol of their invincible wealth, as they thought, was to be built in the shadow of the House of Greenspan. It would be squeezed out of Joe Public who was long disdained and exploited by the Lords of the Street. This time they would build tempt Joe with reckless mortgage loans supported by an “irrationally exuberant” real estate market.

According to the Lords of the Street, a new paradigm had emerged: financial risk could be sliced and diced into oblivion, cheap leverage is here to stay and housing prices can only go up. Many foresaw the folly of this enterprise. Buffet, the great chief of the House of Berkshire Hathaway, called the new instruments of invincible wealth, financial weapons of mass destruction. But the aging House of Greenspan was oblivious to the great folly unfolding before its jaundiced eye. The unbelievers were admonished to stay in Nebraska where they belonged.


Their Punishment

Finally, the Market decided to punish the arrogance of the bankers by destroying the tower. First, it, confused them by splitting them up into many greedy tribes, each with a tongue and agenda of its own, (hence the name Babel, meaning “confusion”). A new tribe, the Shorts, arrived and the hunters soon became the hunted. Alas, they were forced to subjugate their vast pools of CDOs and CDSs to the divine force of the Market. This ultimate humiliation came to be known as the “great MTM slaughter.”

When this happened, the Tower had to be abandoned. The various bankers would migrate in different directions. Many were fired. Others headed West to the Valley of Silicon, no doubt dreaming of other Babels ripe for exploitation—nanotech, infotech, biotech and cleantech to name but a few .

The Tower itself was partly burned and partly swallowed by the great Houses of Morgan, Barclay’s and BOA. As for the Great Houses of Goldman and Morgan, they were forced to pledge themselves to the Fed, under the wise and benevolent protection of Gentle Ben, the new master of the House of Greenspan. He who would later come to be known as “Father Moral Hazard”.


(Adapted by WilliamBanzai7 from the Biblical story of the Tower of Babel)

Morgan and Goldman Become Holding Companies

The Great Subprime “Babel”—A Modern “Tail” of Biblical Greed

Wall Street never changes. The pockets change, the suckers change, the stocks change, but Wall Street never changes because human nature never changes. - Jesse Livermore

The public’s annual loss to Wall Street has usually been estimated in former years at $100,000,000 per annum, but owing to the more recent enterprising methods of the “Street” in manipulating the game, this estimate is now far to small as we shall see.-Franklin Keyes (1904)

Conceit of the Street

Shortly after the explosion of the great “dot.com” bubble something happened that was to change the monetary affairs of all men on Earth.
The investment banking tribes had once again begun to proliferate and fill the Street. They spoke a new tongue--the lanauge of rampant financial innovation. They thought they understood one another well. It was a strange tongue with words like synthetic CDOs, conduiting, CLOs, SIVs, bespoke swaps, CDOs squared, negative default correlations, binomial expansions and stochastic modeling. A tongue curiously reminiscent of the tongue of the House of ENRON.

The generations of bankers before the “dot.com” bubble used fundamental investing and global muscle, paying attention to the fundamental laws of securitiof es analysis and diversification. They were believers in the book of Graham and Dodd.

But the new generation of investment bankers was different. They stressed an opposite code of investing. The smart investor did not count. Their game was a vast opaque pool of derivatives and asset backed securities. Had they confined themselves to this kind of financial life in a modest fashion, all might have been well. But the obscene fee income made possible by cheap leverage, complex financial engineering and securitization techniques made them ever greedier and their stupidity made them think they could beat the financial laws of thermodynamics.

They decided to build a great Tower of mortgage backed securities. The tower would allow them to pillage the housing markets and at the same time and make it possible for them to seemingly eliminate all risk for themselves. Heads we win, tails you lose; that was their credo. The symbol of their invincible wealth, as they thought, was to be built in the shadow of the House of Greenspan. It would be built with the blood and sweat of Joe public long disdained and exploited by the Lords of the Street. This time they would build the Tower with the temptation of excessive mortgage loans in an “irrationally exuberant” real estate market.

According to the Lords of the Street, a new paradigm had emerged: financial risk could be sliced and diced into oblivion, cheap leverage was here to stay and housing prices would only go up. Many foresaw the folly of this enterprise. Buffet, the great chief of the House of Berkshire Hathaway, called the new instruments of invincible wealth, financial weapons of mass destruction. But the aging House of Greenspan was oblivious to the great folly unfolding before its jaundiced eye. The unbelievers were admonished to stay in Nebraska where they belonged.


Their Punishment

Finally, the Market decided to punish the arrogance of the bankers by destroying the tower. First, it, confused them by splitting them up into many greedy tribes, each with a tongue and agenda of its own, (hence the name Babel, meaning “confusion”). A new tribe, the Shorts, arrived and the hunters soon became the hunted. Alas, they were forced to subjugate their vast pools of CDOs and CDSs to the divine force of the Market. This ultimate humiliation came to be known as the “great MTM slaughter.”

When this happened, the Tower had to be abandoned. The various bankers would migrate in different directions. Many were fired. Others headed West to the the Valley of Silicon, no doubt dreaming of other Babels ripe for exploitation—nanotech, infotech, biotech and cleantech to name but a few

The Tower itself was partly burned and partly swallowed by the great Houses of Morgan, BOA and the Fed, under the wise and knowing protection of Benjamin B, the new master of the House of Greenspan, who would later come to be known as “Father Moral Hazard”.


(Adapted by WilliamBanzai7 from the Biblical story of the Tower of Babel)

Hedge Funds May Have Gone Too Far

From The Soundtrack : Ghostbusters (1984)


SHORT Busters…


If there's somethin' strange on your balance sheet
Who ya gonna call (shorttbusters)
If it's somethin' weird an it don't look good
Who ya gonna call (shortbusters)

(Lehman) I ain't afraid a no shorts
(AIG) I ain't afraid a no shorts
If you're seein' CDO's ruinin' your networth
Who can you call (shortbusters)
An' invisible trade dragging down your spreads
Oh who ya gonna call (shortbusters)
(Merrill) I ain't afraid a no shorts
(Bear) I ain't afraid a no shorts
Who ya gonna call (shortbusters)
Morgan Stanley: If you're all alone pick up the phone
An call (shortbusters)

(Paulsen) I ain't afraid a no short
I hear it likes Goldman
(Goldman) I ain't afraid a no shorts
Who you gonna call (short busters)
Mm…if you've had a dose
Of a naked short baby
You better call short busters
(SEC Cox) Bustin' makes me feel good
(Bernanke) I ain't afraid a no shorts

Hedge Funds May Have Gone Too Far

Sympathy for the Shorts
(Lyrics by WilliamBanzai7)

Please allow me to introduce myself
Im a man of wealth and taste
Ive been around for a long, long year
Stole many a mans nest egg and faith
And I was round when Livermore
Had his moment of doubt and pain
Made damn sure that Milken
Washed his hands and sealed his fate
Pleased to meet you
Hope you guess my name
But whats puzzling you
Is the nature of my game
I stuck around AIG
When I saw it was a time for a change
Fired the CEO and his SVPs
While Bernanke screamed in vain
I killed a bank
Was best friends with Hank
When the markets raged
And the cold Pizzas stank
Pleased to meet you
Hope you guess my name, oh yeah
Ah, whats puzzling you
Is the nature of my game, oh yeah
I watched with glee
While your investment banks bleed
Fought for ten decades
To kill paper they made
I shouted out,
Who killed the GSEs?
When after all
It was you and me
Let me please introduce myself
Im a man of wealth and taste
And I laid traps for bankers
Who get fired before they reach Mumbai
Pleased to meet you
Hope you guessed my name, oh yeah
But whats puzzling you
Is the nature of my game, oh yeah, get down, baby
Pleased to meet you
Hope you guessed my name, oh yeah
But whats confusing you
Is just the nature of my game
Just as every banker is a criminal
And all the investors saints
As heads is tails
Just call me hedge fund joe
cause Im in need of some restraint
So if you meet me
Have some courtesy
Have some sympathy, and some taste
Use all your well-learned risk controls
Or Ill lay your trading book to waste, um yeah
Pleased to meet you
Hope you guessed my name, um yeah
But whats puzzling you
Is the nature of my game, um mean it, get down
Woo, who
Oh yeah, get on down
Oh yeah
Oh yeah!
Tell me baby, whats my name

Playing for a Bounce?

Sympathy for the Shorts
(Lyrics by WilliamBanzai7)

Please allow me to introduce myself
Im a man of wealth and taste
Ive been around for a long, long year
Stole many a mans nest egg and faith
And I was round when Livermore
Had his moment of doubt and pain
Made damn sure that Milken
Washed his hands and sealed his fate
Pleased to meet you
Hope you guess my name
But whats puzzling you
Is the nature of my game
I stuck around AIG
When I saw it was a time for a change
Fired the CEO and his SVPs
While Bernanke screamed in vain
I killed a bank
Was best friends with Hank
When the markets raged
And the cold Pizzas stank
Pleased to meet you
Hope you guess my name, oh yeah
Ah, whats puzzling you
Is the nature of my game, oh yeah
I watched with glee
While your investment banks bleed
Fought for ten decades
To kill paper they made
I shouted out,
Who killed the GSEs?
When after all
It was you and me
Let me please introduce myself
Im a man of wealth and taste
And I laid traps for bankers
Who get fired before they reach Mumbai
Pleased to meet you
Hope you guessed my name, oh yeah
But whats puzzling you
Is the nature of my game, oh yeah, get down, baby
Pleased to meet you
Hope you guessed my name, oh yeah
But whats confusing you
Is just the nature of my game
Just as every banker is a criminal
And all the investors saints
As heads is tails
Just call me hedge fund joe
cause Im in need of some restraint
So if you meet me
Have some courtesy
Have some sympathy, and some taste
Use all your well-learned risk controls
Or Ill lay your trading book to waste, um yeah
Pleased to meet you
Hope you guessed my name, um yeah
But whats puzzling you
Is the nature of my game, um mean it, get down
Woo, who
Oh yeah, get on down
Oh yeah
Oh yeah!
Tell me baby, whats my name

Financial Terrorism? - Cramer's Stop Trading! (9/18/08)

Why don't we stop calling them short sellers and start calling them hedge funds. Then we can ask who thought it was a good idea to let them operate in opacity and regulation free.