How to make money like a bank and get away with it

Steps:

1) Write out a derivative contract (credit default swap, collateralized debt obligation, etc) that is so vague yet descriptive and mathmateically heavy that puts to sleep and or confuses everyone from Alan Greenspan to Joe Stiglitz. (see: Even Greenspan Clueless)

2)  Pay a rating agency to mark your securities (those derivatives contracts) as investment grade.

3)  Find a client (Before doing this, simply watch the movie “Boiler Room”) looking to “invest” their extra money.

4)  Sell them said derivative contract and take a cut on the exchange, washing yourself of any risk on the deal.  

…Sleep soundly under the aegis of caveat emptor.

5) PAY ATTENTION, this is where the gut punch turns into a crotch kick and eye gouge:  once you have sold that contract, which you know to be worth next to crap, bet against it in the market.

Goldman, so smart, making billions during a recession, despite needing bailout and crap economy.

The popular analogy here is taking out insurance on your neighbors house and setting it on fire.   It is fitting but here’s one further:  it is like helping someone get away with murder but then, after some time has passed, ratting them out and collecting a huge reward for doing so.  You don’t actually commit the crime, you just enable it [plot, watch their back, drive get away]  and then make a fortune off your insider information.

Bank of America laughs at justice as Federal Judge invokes Dave Chapelle and Jim Brewer’s Half Baked

***Side note for fans of the 90’s Stoner Classic, “Half Baked”:  If the diabetic horse was the economy and Dave Chappelle and Jim Brewer are the Treasury and the Fed  (obviously, because they need to bail out their buddy who killed the horse), who is the guy who sleeps on the couch all day?  The SEC!!  that movie wasn’t just about smoking weed, it was preloading a delicious analogy into “dudes” who wouldn’t otherwise think about Ben Bernanke or Tim Geitner!

Perhaps this all has something to do with our government not wanting a huge trial to come of this:

Fed Chairman, Treasury Secretary and CEO play epic game of Liar Liar Pants on Fire

At least that giant recession is over right?  Mmm, check out the graph of the US national Debt we wrote about here.  Particularly the jump from 2008-2010…Oh, Mary Jane never sounded so good.

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One Response

  1. this reminds me of matt taibbis article in rolling stone this month…without all the cursing

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