时间：2022-09-02 08:42:16
BusinessWeek, April 26, 2010
If you happen to be sitting on theGoldman Sachs bond-trading floor, lifemust feel horribly unfair. You did noth-ing worse than live by the ethical as-sumptions of your market-any mon-ey-making event short of obviously ille-gal is admirable-and now your owngrandfather thinks you're some kind ofmonster. Your world feels upside down.What was right is now wrong, what wasgood is now bad, what once felt likewinning now feels like losing. You'reprobably wondering: What next? Whatwill the angry rabble-all those ordinarypeople who can never really understandyour business-now demand that youexplain to them, so they can disapproveof you all over again?
Here, for a start, is what the worldbeyond Wall Street is entitled to:
Full knowledge of the inner work-ings of your proprietary trading desk. Inparticular, the moment-to-moment deal-ings of your correlations traders fromlate 2004, when they first exploitedAIG's idiotic willingness to sell cheap in-suranee on pools of subprime mortgageloans, until the end of 2007, when theywould have taken most of their profitsfrom the total collapse of the subprimebond markets.
Your bosses claim to have lost $100million or more on the Abacus trade forwhich your firm is being sued. Thisseems, to put it mildly, disingenuous. InMarch 2007, the time of this particularAbacus trade, your prop traders were al-ready short the subpfime market. Wouldthey really have taken a naked long posi-tion in a deal you helped to constructprecisely so that it would fail, withoutoffsetting in some other way on theirbooks?
Sadly, it will not suffice to offer upFabriee Tourre as a ritual sacrifice. Noone is going to accept a then-27-year-oldFrenchman, whose job was apparently tokeep sweet the patsies on the other endof your trades, as the world's authorityon your trading positions. His name isn teven on the top of the list of Goldmantraders on the $2 billion Abacus deal forwhich you are being sued. The name ontop of that document is "Jonathan Egol."Egol appears to have been the bond trad-er at the center of your Ahaeus program.The same Jonathan Egol who told fellowtraders in 2006-a year before this trans-action-that the subprime market wasdoomed. The public eventually will ask:Who is Jonathan Egul, and what exactlywas his game?
Then there' s the matter of your re-lations with the inaptly named "CDOmanager." In this case, the manager wasACA but it wasn't the only one. Otherswere equally pliable. The Securities &Exchange Commission lawsuit chargesyou with using ACA as a shill: The in-vestors in these deals assumed that it wasACA's job to figure out whether thebonds inside the collateralized debt obli-gations were intelligent investments. ButACA quite clearly had no idea what itwas doing-and you quite clearly under-stood that.
The telling details here are the
e-mails between your French salesmanand ACA in which ACA feels it needs tounderstand exactly what John Panlson'sinterests are in this new CDO. Paulson,who had done a great deal of analysis onthe underlying bonds, was of coursepicking the ones he wanted to see insidethe CDO. (Hard to understand why itdidn't disturb you that he was even in theconversation, by the way, but that' s an-other story.) The SEC accuses you of ly-ing to ACA by suggesting that Paulsonwas a long investor in the deal when hewas in fact selling the deal short.
What' s interesting here is what youappear to take for granted: that ACA hasno talent for evaluating the bonds pickedby Panlson. After all, if ACA was doingits job it wouldn' t have eared one way orthe other what Paulson (then a third-tierhedge fund manager) was up to. ACAwould have known which bonds weregood and which were bad, and pickedthe good ones. In their anxiety aboutPaulson's motives we can all glimpsetheir incompetence. They want to knowthat Paulson has an interest in pickingthe good ones because they themselveshave no clue which ones they are.
But if a CDO manager had no inde-pendent ability to select the bonds insidea CDO, then what, please explain to us,was its financial function? Why did youselect ACA to manage your deal?
Finally, what is the reason for beingso unconcerned for so long with the con-sequences of your actions? The massesdeserve to know, for instance, how youbecame blinded to the very simple differ-ence between right and wrong. The moremoralistic among them will ask the ques-tion mainly to fuel their own outrage, themore tactical will ask the question be-cause they sense that the financial systemdoesn't function unless you have the in-centive to think in these terms--and youclearly do not. What begins as an effortto change your business may well end upas an attempt to change your soul.
Just as there was a time when peo-ple could smoke on airplanes, or drivedrunk without guilt, there was a timewhen a Wall Street bond trader couldwork with a short seller to create a bondto fail, trick and bribe the ratings agen-cies into blessing the bond, then sell thebend to a slow-witted German withouthaving to worry if anyone would everknow, or care, what he'd just done. Thatjust changed.