» Posted by Martin Weil on February 24, 2010

I shared the quintessential trait of all young attorneys: unrelenting, paralyzing fear. It overwhelms everything we do and contaminates the first two to three years of our law jobs. ... I know nothing. How the hell did I get this degree? How the hell did I pass the bar? Law school didn't teach me anything. ... How long can I fake this before they figure it out? How come everyone else knows what they're doing? What happens if I get fired or fail? I bet I'll get disbarred! Please, God, don't let me get disbarred."

An epic saga of real estate foreclosure and redemption, and the real-world education of newly-minted lawyer, Wajahit Ali

» Posted by Martin Weil on January 21, 2010

So writes Reuter's columnist Felix Salmon this AM. And while I have at least one colleague who is skeptical that this is anything more than window dressing, I say it is a long overdue and important step in the right direction.

Simon Johnson, outspoken critic of the mega-bank bailout, concurs "Paul Volcker prevails."

» Posted by Martin Weil on January 14, 2010

So says Jon Stewart as reported here

» Posted by Martin Weil on January 01, 2010

A healthy financial system cannot be built on the expectation of bailouts.

Current head of President Obama's National Economic Council, Larry Summers, in a 2000 speech referencing the emerging market crisis of the late 1990s.

Simon Johnson, former chief economist for the IMF and outspoken critic of the Bush-Obama bailouts of major banks, wishes that Mr. Summers would simply employ the same advice he found appropriate for South Korea circa 1998 to the USA in 2009.

And with that, I bid adieu to 2009 and the Oughts.

» Posted by Martin Weil on December 31, 2009

Pro Publica, a new online journal in the public interest, is digging up what it can on the CDO collapse, taking up the mantle dropped by the SEC and Congress.

CDOs (Collateralized Debt Obligations) - not to be confused with CDSs (Credit Default Swaps) - were a major contributor to the excess risk that was created during the financial free-for-all era of the pre-Lehman collapse. CDO losses are on the order of $600B with much of this cost born by us the taxpayers.

If you were involved in the CDO business during the end days of the boom, please contact Jake and Jesse -- cdos@propublica.org or (917) 512-0258. Or, if you have information about others we should reach out to, please send that along, too. This is a serious investgative inquiry - responses can be confidential.

» Posted by Martin Weil on December 24, 2009

Interrupting Christmas prep for another in my caveat emptor, Wall Street broker edition, series.

The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen. When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else's house and then committing arson.

Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York., quoted in a NY Times "hitjob" (per the Goldman PR folks).

From the Times:

"Mr. Egol, a Princeton graduate, had risen to prominence inside the bank by creating mortgage-related securities, named Abacus, that were at first intended to protect Goldman from investment losses if the housing market collapsed. As the market soured, Goldman created even more of these securities, enabling it to pocket huge profits.

Goldman's own clients who bought them, however, were less fortunate.

Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments, according to former Goldman employees with direct knowledge of the deals who asked not to be identified because they have confidentiality agreements with the firm."

» Posted by Martin Weil on December 21, 2009

This amusing Op-Ed in the NYT by Joshuah Bearman tells the story of his grammar school days and his unwitting creation of a futures market for sweets that got out of hand. In addition to being a good story, it is an excellent parable on the mortgage/CDS market and illustrates why this latter market was bound to fail. (Thanks to Marilyn for the pointer.)

» Posted by Martin Weil on December 15, 2009

...is that the Administration and Congress start paying much more attention to this man:

Bankers and regulators have not come anywhere close to responding with necessary vigor to the worst economic crisis in 70 years. There is a lot of evidence that financial weaknesses brought us to the brink of a great depression . . . The proposed changes are like a dimple.

Paul Volcker, former Federal Reserve Chairman and erstwhile adviser to the current US Administration (quoted in a Bloomberg article.)

» Posted by Martin Weil on December 01, 2009

License plate on a Porsche Cayenne in Greenwich CT. From Andrew Sorkin, author of the recent book of the same name - but not the plate's owner.

» Posted by Martin Weil on November 27, 2009

File under "If it's too good to be true," a continuing series.