The Agonist

Enough Is Enough!

Let Greece default:

Enough - enough of having the entire world paying for the stupidity, mistakes, and greed of the banking elite. Enough of taxpayers footing every bill. Enough of US taxpayers being responsible for Greek, Portugues, Spanish, Italian, Latvian, Ukrainian "rescues" just so those banks who are loaded to the gills with their sovereign debt can receive another year of record profits.

Well said.

Surrender, Dorothies!

It seems to me that the "good news" Republicans were having poured into their ears earlier this year about the mid-term elections is quickly turning into Gonzago's poison.

Item 1 - Unemployment claims at lowest level in months.

Item 2 - Republicans fold like cheap suitcase.

Item 3 - Rising star says no way.

Item 4 - Arizona law is splitting party.

Item 5 - "Drill, baby, drill" backfires -- literally!

Of these five items, item number one is most important, followed by item 2. The other three pretty much are current blips on the radar but have potential impact down the road.

The key to a Democratic hold on Congress is jobs, pure and simple. When people work, they're happy. When they're forced out of work, they're mad. When they are forced out of work and look down the road and see no prospects, they're terrified.

Republican election strategy since 1994 and the Contract On...I mean, "With" America, has been to prey on the terrorising of Americans. The more fear, the more likely Americans will vote Republican.

The logic is warped, of course. Americans always do better under Democratic presidents. Even in this current recession, American workers have found a haven with Obama that they did not have with Bush. Republicans have run this country with a curious attitude of enriching those that have, a sentiment that should have gone out with the overthrow of the various European colonial empires. Once upon a time, government was for the protection of power for the elite. No longer.

Couple the fear over lost jobs with the classist anger over the financial bailouts Bush impressed upon the country and Obama continued, and you see a boiling over of anger, which the Democrats have worked hard to focus on the GOPartisans.

Has it been successful? It seems so, but there's plenty of time before November and politics is the art of the possible. It's feasible that the Republicans can come up with a successful midterm strategy that somehow dents this armor that seems to be forming around the Democrats.

Surely, however, the Democrats will not lose as badly as many hand-rubbing gleeful rightwingers had forecast even in March when healthcare reform was on the ropes. A few seats? Probably. Lose the Senate majority? Not very likely at this point. Lose the House majority? Hell, no.

What the Democrats will have to face come January 2011 is a more radicalized Republican minority, one with more Teabagger support and a more militant agenda.

To quote a moron: Bring it on.

NY Fed AIG Coverup - "criminal or civil charges possible" SIGTARP

Neal Barofsky dropped a bombshell at the end of an interview with Richard Teitelbaum of Bloomberg.com yesterday. He indicated that individuals at the New York Federal Reserve Bank may be liable for criminal or civil charges. Barofsky is the Special Inspector General of the Troubled Assets Relief Program (SIGTARP).

Barofsky says the question of whether the New York Fed engaged in a coverup will result in some sort of action.

“We’re either going to have criminal or civil charges against individuals or we’re going to have a report,” Barofsky says. “This is too important for us not to share our findings.”

In a statement, the New York Fed said: “Allegations that the New York Fed engaged in a coverup of its intervention in AIG are not true. The New York Fed has fully cooperated with the Special Inspector General.”

He (Barofsky) won’t say whether the investigation is targeting Geithner personally.

There's a double hedge here, of course. There may just be a "report" and Geithner may or may not be a target. That's far from comforting for the Secretary of the Treasury.

Barofsky was more specific about insider trading by bankers aware of TARP awards prior to public disclosure of the largess.

Barofsky ... says he’s also looking into possible insider trading connected to TARP. He says his agency would want to know if bankers bought stock in their companies before it was made public that their institutions would get TARP money, for example.

“There was a time when, if you got that word the stock price would go up, and if you were to trade on that information prior to the public announcement, that would be classic insider trading,” Barofsky says.

The article quoted a Chicago based executive saying that Barofsky has not gone fare enough into the core criminal behavior on Wall Street, underwriters of CDOs. This is a key point. While targeting the NY Fed and insider trading on the street represent crimes by individuals or groups (aka conspiracy), the process of underwriting CDOs is a system wide charge of fraud. Imagine the disgorgement and recovery.

Janet Tavakoli, founder of Chicago-based Tavakoli Structured Finance Inc., says Barofsky hasn’t been aggressive enough. She says SIGTARP should be running criminal probes of the bankers who underwrote and managed the collateralized debt obligations that were at the center of the financial meltdown.

Barofsky talks the talk and does it well. Will he walk the walk.

Link: Office of the Special Inspector General of the Troubled Assets Relief Program

Sign up to receive SIGTARP press released email updates

Iraq & Afghanistan Update/ April 29

April 29

Pakistan Taliban chief Hakimullah Mehsud is alive, says spy agency

The Taliban leader in Pakistan, Hakimullah Mehsud, survived an American drone strike in January and is alive and well, a senior official with Pakistan's Inter Services Intelligence agency told the Guardian today.

Mehsud was reported to have died in a CIA drone strike in South Waziristan in January but, although Pakistan's interior minister claimed he had been killed, the death was never confirmed by either US or Pakistani intelligence.

Today the senior intelligence official said he had seen video footage of the missile attack on Mehsud but other intelligence had since confirmed the insurgent leader survived. He declined to elaborate further.

"He is alive," said the official, who spoke on condition of anonymity. "He had some wounds but he is basically OK."

** Legal questions raised over CIA drone strikes
** Actually, the Army Kind of Likes Your Blog
** Pentagon issues downbeat assessment on Afghanistan
** Afghanistan – the new skiing destination
** Rethink Afghanistan

Iraqi men tortured, raped at secret jail, group contends

Iraqi prisoners were tortured and raped at a secret detention centre in Baghdad in the past year, Human Rights Watch said Wednesday.

Men who had been held at the Muthanna prison in western Baghdad reported abuse including beatings, electric shocks to their genitals and rape, Human Rights Watch said in an e-mailed statement.

** Iraq 'secret prison' inmates allege horrific torture
** Sadr: Renegotiate 'illegal' Iraq oil deals

Please check comments for related articles and discussion

The Card Counters are running the Casino.

Over the last 15 years Quantitative hedge funds have altered the way Wall Street operates. Starting with Long Term Capital Management (LTCM the first real large quant fund) that almost broke the bank in 1998, only to be bailed out by wall streets other banks. They all use PHD's in Math, Physics, Computer Science, and very large computer powered models, that look forward the slightest anomaly in various markets at the same time. Then they pounce. Using immense leverage they have made BILLIONS for themselves and for a select group of clients. They operate independently and within Large Firms (Morgan Stanley, Goldman etc. have them) If you want to learn more read Scott Peterson's book "the Quants". One thing in the book became very clear, they all like to gamble on anything. Many play in the World Series of Poker.

When the quants took over the business, the game became rigged. It's like letting the card counters control the game. This has to stop because it's not a game.

Are Senate Democrats . . .

. . . actually growing a pair? Looks like something is emerging.

Looks like the Democrats calling the Republican's bluff worked. More like this please:

Senate Republicans are prepared to end their stalling tactics on new banking regulations and will attempt to change the bill on the Senate floor, Republican officials said.

Dennis Kneale: Whiner

Today's WATB is Dennis Kneale. I'd name him the wanker of the week, too, but I'm sure Atrios has already done that.

Fewer Churches Means . . .

. . . fewer pedophile priests and fewer church leaders like John Hagee. Bonus, if you ask me.

The Jaded Monkey Is In The Glove Box

Apparently, Goldman Sachs doesn't get it about both the financial crisis and the Senate hearings:

Goldman Sachs Chief Executive Lloyd Blankfein told legislators Tuesday that when clients approach the investment bank as a market maker to buy or sell securities, they don't care what the firm thinks of the securities or whether it's betting against them.

Now, for some investors, that might be true. Jaded monkeys like me who have spent 30 years in the underbelly of the financial markets dealing with the cowboys have learned how to read between the lines and focus on specific words and phrases in offerings and private placement memoranda would have hedged the Goldman Sachs offering, asking to get in on the other side of the deal.

Similarly, if I was offering to bundle my holdings and have GS place them, I'd want them to minimize my risk and play down the potential for loss. It's just good business sense, if by "business sense" you mean leaving the suckers holding the bag while I sail to Bimini.

Which, unfortunately, is precisely what "good business sense" has come to mean in America in the 21st century.

But, to borrow from another set of hucksters, wait! There's more!
Sen. Carl Levin, chairman of the Permanent Subcommittee on Investigations, lashed out at Blankfein, claiming that Goldman creates conflicts of interest when it underwrites securities while betting against them.

Levin cited examples where Goldman employees described collateralized debt obligations the firm was selling, or assets backing those deals, as "shitty (corrected for impact)," "crap," "junk" and "lemons."

You'd think these morons would have learned from the Enron debacle. Worse still, as an employee of a FINRA registered firm, my e-mails are subject to storage and archiving for possible use in any investigation of my firm's practices.

Let's tie these two together: It's one thing to sell a risky security to an investor and make the blanket disclaimer that it could conceivably go belly up faster than fish after dynamite. It's another thing to know an investment is shitty and still try to pump out a sale. Markets demand perfect information and if your brokers are proudly boasting of selling a pig in a poke, that same braggadocio ought to be shared with the investment community, and not covered up in order to maximize your profit on betting against the very instruments you've sold.

Derivatives serve some purpose, it's true. An airline that hedges its fuel costs by purchasing futures on its fuel is doing right by its shareholders. Further, if it goes out and places a bet that the price will go down below the future contract price, it is mitigating its loss on the contract.

And vice versa for the firm selling the fuel futures contract. It's an entire other thing, tho, for the broker selling the futures contract to place a side bet based on knowledge he or she has with respect to the price of crude, say, that either party or both is not savvy to.

And still, Goldman Sachs are not getting it! As a "market-maker," Goldman Sachs has an obligation to set the ground rules for the market it is creating. It has what's called a fiduciary responsibility (a responsibility not unlike the one a doctor has to a patient or a lawyer to a client) to perform up to certain standards that exceed the expectations of investors. And it has a well-earned reputation to protect.

In one fell swoop, in one release of e-mails about a series of "shitty deals," Goldman has destroyed its credibility, the markets' credibilities, and rejected its fiduciary responsibility. Rather than admit this, however, Goldman has basically gone on the record as saying they acted in accordance with what some fly-by-night shyster would have done: fleeced investors.

There was a time in this country when an investment bank-- Merrill Lynch, Smith Barney, Goldman Sachs-- would have competed for clients based on its reputation and the trust its investors and clients placed in them.

Now, I'll admit one thing: the Internet and the rise of discount brokerage houses has made that aspect of their business moot. After all, why pay 2% of your assets and 20% of any trades to Goldman or Bear Stearns when you can commit the same trade at TD Ameritrade for $9.99? You keep more of your money, and it's the same damned shares.

This forced Wall Street houses to find new and more innovative ways of fleecing people so they can afford to drive their Beamers and fly their Falcon 50s to their beach house on Bermuda. But that same technology that defeated one aspect of their business made this other aspect of their business wildly profitable.

Powerful computers, advanced mathematics, and the ability to sift through mounds of information well-ahead of investors has given the Wall Streeters a powerful leverage over not only investors, but the American marketplace. Wal-Mart no longer sets prices as much as Wall Street does, by forcing Main Street to dig deeper and deeper into its bottom lines and come up with more and more income and dividends.

And this, this is the great tragedy of Goldman's blind spot. They aren't just stiffing investors and clients, they're stiffing the poor shnooks who bought houses and now have lost value in them, and opened shops and had to close those, and tried to keep hold of a job that was terminated because the company lost money directly or indirectly to Goldman's coffers.

Books to burn

I took my entire share of royalty interest for Ruminations from the Garden in books. They arrived yesterday, 2,400 copies. Reading that number doesn't do justice to the fact of the matter. Carrying 80 boxes of thirty books each into the house and stacking them up does.

We shouldn't lack for door stops, furniture levelers or fuel for the wood stove should a new ice age develop. Hopefully someone will want to read the thing. While not perfect, it's a much more professional version of the book.

If you're inclined to buy one, contact Speir Publishing.

And if you have a book that needs publishing, contact Paul Speir. He worked hard on this. He's honest, intelligent and decent. Plus he has a good wife, a newborn daughter and needs work. Proceeds from sales are his.

Paul tells me he has a limited number of copies of the book free to those willing to write a review and publish it. The review need not be positive. Honesty and perhaps the cost of postage is all that's required.

Iron Butterflies: How Women Can Rule the World Without Compromising Their Best Qualities

When women decide to climb the corporate ladder or enter politics, before entering the fray they are usually forced to gird their loins and emotionally armor themselves like men. However courageous, adopting a command-and-control style of leadership often comes at great personal cost. In her new book, Iron Butterflies: Women Transforming Themselves and the World, developmental psychologist Birute Regine makes clear the extent to which women contort themselves to make it in a man's world. If they're not acting like Amazons, they're becoming what she calls "shape-changers."

But that's only the beginning of the story. Ms Regine documents how, at a certain point in their development and often out of necessity, successful women bring traits and values traditionally associated with women to their callings and into the marketplace. In fact, writes Ms. Regine, a female-led revolution in leadership style, however off the radar, is underway.

In a complex environment and an interconnected world, skills associated with women will prove more and more effective and keenly pertinent: their holistic view of the world, their ability to see interconnections among things, their relational intelligence, their tendencies toward collaboration and inclusion, their ability to empathize."

She calls these women Iron Butterflies. To head the jokes off at the pass, the author borrowed the phrase from a poem by poverty worker and poet Janice Mirikitani, who infused it with much more meaning than a second-rate psychedelic band ever did. To Ms. Regine, the term captures "their individual resilience and fragility, conviction and poignancy, their inner beauty and outer strength."

Iron Butterflies is especially essential reading for young women who often fail to appreciate just how hard-won are the opportunities they enjoy today. Nor do they realize, as Ms. Regine points out, that sexual discrimination still exists -- as they'll find out when their heads start thudding against the glass ceiling. It's also an important book for men, who need to learn that they've got to get with the program or get out of the way. In fact, if they too adapt some of women's ways in the working world, they may not only find they can breathe a sigh of relief, but, in the long run, achieve more success.

Ms. Regine interviewed a staggering 60 successful women from all walks of life and throughout the world including businesswomen, CEOs, a Congresswoman, a governor, an ex-prime minister, a Pulitzer Prize-winning novelist, a winemaker, artists, doctors, and nurses. These women discuss their fallibilities and struggles, which, women at the lower end of the job spectrum will find, are striking in their similarity to their own. Among the qualities that make Iron Butterflies exceptional: 1. how they prevail over a Job-like procession of obstacles that are a revelation to white male readers in particular, 2. their willingness to look deep into their souls and open themselves to change when they learn the extent to which they've been contorted by adopting a man's traditional approach.

The word "inspiring" is tossed around way too frequently. But in its depiction of the hardships that many of these women endured, sometimes from their earliest ages, and their emotional resilience and flexibility, this book inspires.

The advertising copy for Iron Butterflies notes that women who were interviewed for the book speak about their lives with "disarming candor." Talk about understatements. For example, wait until you read the interview with anti-landmine campaigner Jodie Williams, who, of course, was awarded the Nobel Prize Peace Prize. You'll swear that the author got her drunk. But that's doing Ms. Regine a disservice. Whatever she's sharing of herself that induces them to open their hearts to her is testimony to the extent to which she's an Iron Butterfly herself. We'll use that as a jumping-off point for questioning Ms. Regine.

How did you get women like Jodie Williams to open up like they did?

Being a psychotherapist and coach for three decades helped. I'm a good listener and pretty good at asking thoughtful questions. But the way they opened up, their willingness to show their vulnerabilities, really says more about them than me. These women want to help other women by sharing their stories. Adrienne Rich wrote that when a woman tells the truth she is creating the possibility for more truth around her. The brutal honesty in some of these stories shows women's reality as it actually is, not as how we wish it were or how we would like to think it is. We don't often see the blood, sweat and tears behind the success stories. These women are pioneers, in actually doing what Adrienne Rich said: by telling their own truths they are inviting other women to do the same. As a result, readers will realize they are not alone trying to improve their lives and the lives of those around them.

You said that while writing your previous book with your husband that you came to believe that women are in a position to lead in the twenty-first century. What were you seeing or hearing that led you to that conclusion?

What I saw was a need for more feminine skills in our leaders and also simply more women leading. This is needed to bring balance to a masculine and male-dominated world that is becoming increasingly interconnected and interdependent. And, with the recent economic meltdown, I think people really get that we no longer can stand alone or fall alone. We need women's feminine skills to clean up the mess that, frankly, men in power have wrought across the planet. We need women's holistic view of life, their ability to see interconnections between things, their relational intelligence, their tendencies toward collaboration and inclusion, and their ability to empathize and nurture. All these skills are keenly pertinent to our new global reality. Ironically perhaps, the qualities that have kept women out of the mainstream are now the very same qualities that empower them to lead. [Emphasis added -- couldn't let that one go by unremarked upon. -- Ed.]

The women you interviewed were well advanced into their careers before they metamorphosed into Iron Butterflies. Do you think young women entering the work force, government, or NGOs still need to arm themselves like gladiators?

I wish I could say they don't, but if women are working in male-dominated environments, and there is little support from other women, they have to adapt to the dominant culture in order to survive. The good news is that there are more organizations than ever of women supporting women, so that they can become Iron Butterflies, women leaders who don't play the game but rather change the game. These women are slowly but surely transforming what I call the gladiator culture that currently prevails in most business organizations. But this kind of sea change doesn’t happen overnight. I do think though that we are getting closer to a tipping point.

Noting how few women were convicted in the Enron, Tyco, and WorldCom scandals, you write: "Women's presence can disperse the testosterone cloud of omnipotence that has corrupted our institutions with so much immoral and unethical behavior." Can you explain why women are more ethical?

Generally speaking women are relational for biological, social, and psychological reasons. The psychologist Carol Gilligan defined women's morality as guided by care and responsibility. When you care and take responsibility you aren't just thinking about yourself, you are thinking about the impact of your choices and behavior on others. That makes you more accountable, which in turn means you tend to think things through more carefully. Jody Williams called it "enlightened self-interest." Of course we are driven by self-interest, but in an interconnected reality it is in our interest to have concern for others. It's what we mean by the soul at work -- the individual soul and the collective soul.

One of my favorite moments in the books was the response of businesswoman Judith Baker to being sabotaged by the man she worked under. Before she was about to make a presentation to a client, he showed up uninvited and informed her of complaints that she was abusive to other employees. You write that, upon seeing his true stripes for the first time, "Judith unpacked the materials for the presentation and said, 'Here are the materials for the meeting. I resign. I'm sure you can handle it.' She got up and walked out."

The reader cheers her on, yet she later rues her behavior as "an unbridled Fury." Her description of how she might have handled the situation better seems to go to the heart of what being an Iron Butterfly in the workplace is about. Please talk about that.

Being "an unbridled Fury" has its benefits! Her anger burned its way to a place of authenticity where Judith could no longer deny what was going on. What I think she rued was that she was reacting to the situation, and so was not fully in charge. I mean quitting one's job on the spot was extreme and made her point! But ultimately giving up her job wouldn't benefit her. When the Fury comes out, it is the fed-up woman saying "enough is enough." The Fury is also an indicator of your anger at yourself for a lot of missed opportunities, all those small moments when you could have confronted the situation but didn't, until it reached an intolerable point.

When you conduct your interviews, it's as if you're a butterfly alighting upon flower after flower. How did writing Iron Butterflies change you?

Interviewing these women was an amazing experience. Minutes into the interview, I often felt like "Girlfriend!" Their wisdom, their stories continue to guide me in my own life. The journey of the book was exhilarating and humbling. I sacrificed a lot for this project. Getting the book published seemed to be an endless lesson in patience and determination. I faced delays, obstacles, and rejections from the publishing world. There were times I wanted to just chuck the whole thing, but it just wouldn’t let me go! And it still doesn't. There were many layers to the writing of this book, the stories and lessons, the cultural context, and the global dimension. For me the most profound insight to emerge was a new way of looking at vulnerability and how it has the power to shake up a deeply enculturated schema. I have changed: I’ve never been stronger or more vulnerable.

In a final, related question, what did it take for you personally to emerge from your chrysalis and become an Iron Butterfly?

I think I’m still emerging! It’s one of the paradoxes of Iron Butterflydom. I thought getting this book published and out into the world was the end of a journey. It turns out to be the beginning, because now I see that the book is a springboard for an Iron Butterfly movement. Others are telling me I am called to this service, and in truth it is a calling. At this stage of my life I unexpectedly find myself on a grand mission: to get the Iron Butterfly message out as we enter the Era of Women.

Goldman Testifies regarding short selling

Today we were entertained by a senate hearing looking into Goldman's role in a fraud case. Carl Levin referred to the deal as a shitty deal on national television. Wow! The first group of former and perhaps current employess in their Structured Products group. When they were asked for a yes or no response to the question " Should you always act in the best interest of your clients" by both Levin and Collins they basically said that they provide liquidity and are not in an advisory role. It was clear that the Senators don't know the difference between market making and advisory roles. Traders facilitate trades, they don't provide investment advice.

Later they trie the same tactics to other senior executives at Goldman, that didn't go as well for the senators. Blankfein is coming up. The big problem with Goldman's action is they made too much money. Hardly a crime for a public company.

The senators kept hammering at how Goldman profited from short selling these derivative products. The deal is not illegal, the products are not illegal, going short is not illegal. Goldman is accused of failing to disclose material facts about the ABACUS deal.

My understanding is John Paulson's hedge fund approached Goldman trying to go short the sub prime mortgage market in 2007-08. He saw the housing market collapsing and he wanted to profit from it. Goldman agreed to provide a product for him to short. They went to ACA, an asset manger of these types of securities to put together such a portfolio. Paulson had certain requirements for the securities in the portfolio. Both Paulson, ACA and Goldman had input into the portfolio. Remember this is a synthethic CDO portfoli. The securities are created out of thin air. They use credit default swaps to gather the cash flows to pay the buyers.

The average life of the tranches created were Super Senior 3.9 years, AAA 4.5 years, AA 4.6 years, AA- 4.7 years A 4.9 years Equity 5.2 years. Therefore if the underlying mortgages continue paying for 5.2 years the buyers get a really handsome return. Paulson bought Credit default swaps saying these mortgages would fail before that. ACA was also a bond rating agency. This portfolio was rated AAA by Moody's and S&P. While the underlying mortgages had a 30 year life, if they lasted 5 years the buyers win. However the securities were of such poor quality the bet bet by Paulson seemed to be a good one.
Some of the underlying facts. Loans were made in 06. 22% in CA. 37% interest only average down payment less tan 7%. Several loans greater than the value of the house.Deal done in April 07 Oct 07 83% downgraded.100% downgraded Feb 08. Feb 09 bondholders wiped out. Paulson makes a billion on his bet.
What Goldmans overall position on this deal, who knows. I'd say probably short.

These securities should be outlawed is the bottom line. Will congress make them outlawed, probably not.

More later.

Blankfein V. Levin

This is riveting TV. I know that is hard to believe, but it is true.

Levin is absolutely destroying Blankfein right now. And as for David Brooks telling Goldman its better to come across as dumb and decent versus smart and sleazy isn't working. They've come across as largely dumb and sleazy today.

Now President McCain is questioning Blankfein and even the old maverick isn't tossing softballs on Blankfein.

Blankfein says Goldman has given $1 billion in philanthropy. Can we get a fact check on that?

Here comes Sen. Kaufman. This might be good.

As a side note: I just read this post by Krugman and agree: it is getting scary out there. China bubble? Greece falling off a cliff? Portugal? Spain? This is getting uglier by the day.

And the vultures are circling the drain.

"We did not know, we did not behave like we knew it . . . we did not know that the housing market was going to happen like that," says Blankfein. So, Blankfein takes the dumb defense. Hell, I'm a dirty hippy blogger and I knew. Can I get a job at Goldman? Because I sure as hell can sell shitty deals, all day long!

"We're not that smart," says Blankfein. Fucking understatement of the decade.

Simon Johnson says the Democrats have a chance to really put the squeeze on the Republicans. After today's hearings I agree. Now is one of the best opportunities to go for the jugular. Will they? I'm not holding my breath.

Blankfein has become much less combative while being questioned by Coburn. Then again, Coburn, while not tossing softballs, isn't exactly tossing sliders, either.

Did Blankfein just say what I thought he said? "We support the direction of the bill [as it is developing currently]," he said. He clearly irritated Coburn and his Republican talking points. Blankfein also said, "experience with FDIC makes me respect them a great deal." Damn, is Blankfein actually sounding someone contrite to cozy up the Dems? WTF?

Coburn asks Blankfein asks, "why did Goldman release Mr. Tourre's emails and not everyone's? Was that a political ploy?" Blankfein is clearly extremely uncomfortable with this question. He's stumbling over his words and then says, "we just wanted to come clean about what happened." There is a weird political game going on here that Goldman is playing. Coburn makes the point: Tourre is going to be your whipping boy. "We didn't release those emails," said Coburn. Blankfein blinking furiously now.

QOTD

Quote of the day comes from Richard Adams (full disclosure: Adams was an editor of mine at The Guardian):

There's only one way to get through a Senate hearing: you have to remember that senators believe they have the wisdom of Solon and the divine powers of Byzantine emperors. The best tactic is throw yourself on their mercy. The mistake being made by the Goldman Sachs staff here is that they think they are in an episode of Law And Order. They're not. They're in an episode of Rome, subject to the whims of a brutal tyrant.

Goldman Sachs executives and traders are doing Goldman a huge disservice by being as truculent and evasive as they are. When they piss off Senators like Tom Coburn they are in deep trouble. Adams is correct: when you deal with Senators it is wise to remember they think they are gods, or at the very least, minor deities. Who the gods destroy, they first make rich.