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Was Fabrice Tourre Cheating On His Girlfriend? Are CDOs Really Nothing More Than "Intellectual Masturbation"?
Zero Hedge is currently going through the 100 or so pages of just released Goldman emails that disclose in excruciating detail the events from late 2006 to late 2007 occurring in Goldman's mortgage trading business. We will have a lot more to say on this tomorrow, suffice to say that we were pleasantly surprised that C-BASS, which we uncovered recently may be implicated in the Goldman SEC fraud scandal, is again involved. We also feel bad for Harvard and MS Prop, and a little better for Hayman Capital. Stay tuned. In the meantime, we will take a brief detour into the financial yellow pages, as we focus on the curious case of Fabrice Tourre, who once again plays a prominent role in today's email discovery. The first thing that caught our attention is the original "Fab Fab" email, finally reproduced in its entirety. One tangent that may be relevant to gleaning some more insight into the character of the "fabulous" 27 year-old mortgage god, is that at the time he penned his email to girlfriend (#1), then Goldman co-worker, Marine Serres, he was likely also with girlfriend (#2) Fatiha Bouktouche, a Columbia University post Doc, to whom he may have been disclosing proprietary Goldman holdings and trades. Who knows to whom, when or how Fatiha may have leaked insider trades whispered to her by Fabrice, and who knows what CDO trades Marine was pitching to the retarded (and soon to be bankrupt) European banks gobbling up everything Goldman would sell them, structured and originated by her boyfriend.
We recreate the original email:
From: Fabrice Tourre
Sent: Tuesday, January 23, 2007 11:34 PM
To: Marine Serres
Subject: Fw: ft--fridayDarling you should take a look at this article... Very insightful...More and more leverage in the system, l'edifice entier riqsue de s'effondrer a tout moment.... Seul survivant potentiel, the fabulous Fab (as Mitch would kindly call me, even though there is nothing fabulous abt me, just kindness, altruism and deep love for some gorgeous and super smart French girl in London), standing in the middle of all these complex, highly levered exotic trades he created without necessarily understanding all the implications of these monstruosities !!! Anyway, not feeling too guilty about this, the real purpose of my job is to make capital markets more efficient and ultimately provide the US consumer will more efficient ways to leverage and finance himself, so there is a humble, noble and ethical reason for my job ;) amazing how good I am in convincing myself !!!
Sweetheart, I am now going to try to get away from ABX and other ethical questions, and immediately plunge into Freakonomics... I feel blessed to be with you, to be able to learn and share special things with you, I love when you advise me on books I should be reading. I feel like we share a lot of things in common, a lot of values, topics we are interested in and intrigued by... I just love you !!!
Your chtit Fab
The first thing to note here is the biographical details on Ms. Serres. Curiously, a generic google search reveals that her LinkedIn profile has been deleted promptly and very recently. Too bad once something hits the Interwebs it never disappears. Which is why we recreate the cached version of the page which Ms. Serres decided to take down in a hurry.
It may be interesting to get some insight into just who Ms. Serres was selling "Structured Products" and just what "over the Wall" information she may have been privy too. We know that there is something in Ms. Serres bio that prompted her to
take down her LinkedIn page immediately. We would like to find out what
it is. It would not be far fetched to imagine that Ms. Serres was instrumental in selling CDOs and other structured products to Goldman's European clients. Surely, this such a blatant and very much illegal practice demands at least another Congressional investigation. Congress - get right on it. As a reminder, Gail Kreitman, whose testimony was critical in the SEC case against Goldman, and who mysteriously departed Goldman in June 2009 was also a structured products salesman at Goldman (Gail's husband was a founder of subprime "specialist" C-BASS, which lilquidited and subsequently was acquired by Goldman Sachs for pennies on the dollar). According to the FSA database, Marine Charlotte Alexandra Serres left Goldman on October 31, 2007.
To be sure Marine felt the same way the Fab said he felt about her:
From: Serres, Marine
Sent: Wednesday, March 07, 2007 6:43 AM
To: Tourre, Fabrice
Subject: RE: DinerAnd right now, I'd love nothing more than just curl in your arms, feel the warmth of your skin and just stay there smiling for hours (with occasional - frequent - tender kisses... ;)
Reveille toi doucement mon amour...
Ta chtite puce
What is interesting in the email discovery is that there was another woman in the life of "kind and altruistic" Fab Fab: then Columbia University Post Doc Fatiha Bouhktouche.
In an email Fabrice sent out on January 29, less than a week after the critical January 23 email sent to Marine (see above), he writes:
Yep, work is still as laborious, it's bizarre I have the sensation of coming each day to work and re-living the same agony - a little like a bad dream that repeats itself... In sum, I'm trading a product which a month ago was worth $ 100 and which today is only worth $ 93 and which on average is losing 25 Cents a day...That doesn't seem like a lot but when you take into account that we buy and sell these things that have nominal amounts that are worth billions, well it adds up to a lot of money.
When I think that I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: "Well, what if we created a "thing", which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?") it sickens the heart to see it shot down in mid-flight... it's a little like Frankenstein turning against his own inventor ;) Anyway I don't want to bore you with my stories, I'm going to look in the yellow pages for the phone number of the ABX market and I'll send it to you, because I believe that a soft and sensual feminine intervention is necessary for Fab's survival
Kisses
Fab (In string, which is rather free)
To which Fatiha, presumably unaware of Marine's existence in far away London replies:
j'aurais bien aime t'aider...mais j'ai cherche les coordonnees sur les yellowpages et j'ai pas trouve...A defaut des marches, je pourrai aussi essayer d'intervenir aupres de toi de facon douce et sensuelle... ;') Just ler me know si ca peut t'aider!!! bizzzzzzzzzoux
Even non-French speaking readers can figure out the gist. We are far from making moral judgments on Fab's love life, who a mere 6 days earlier pledges himself as full of "kindness, altruism and love" for another woman, although has no problems to carry on a parallel existence filled with "bizzzzzous" and more than one "intervention feminine douce et sensuelle." However, the question of just how much confidential information about Goldman's prop trading positions the seemingly endlessly boastful Fab was disclosing to his at least 2 girlfriends deserves additional probing. And while we are certain that a certain Columbia post-doc did not have access to trading ABX, IG, CDO2 or any other "intellectual masturbation" product which only Goldman can specialize in, who knows who else may have benefited from Fatiha's information conduit.
We are confident that the hearing on Tuesday will cover none of these moderately relevant issues, and instead will be based on soundbites from Congressional staffers who are pounding the populist drum without having a grasp of the big picture, in hopes of taking advantage of the Goldman scapegoating campaign to boost declining ratings.
We will have more to say about the full email discovery tomorrow, as there are some other much more relevant disclosures, some very critical about just how Goldman takes advantage of its market monopolistic position to push the market in any way it wants.
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Value added as proportion of GDP, 2006 figures:
You might also want to throw in
There is also 'Publishing industries (includes software)' at 1% and 'Broadcasting and telecommunications' at a huge 2.4%, though it's hard to break out the badwrong entertainment components from those. (Telecoms is considerably larger than entertainment iirc, while computer games are supposedly now bigger than motion pictures.)
More fundamentally, for the most part sports and entertainment seems to be serving its customers fairly efficiently, whether you or I approve of all the product, and there's no indication that much more utility would be generated if it were shrunk. And in fact the stinkiest aspects of the entertainment complex (like gambling and drinking) are indeed curtailed by the authorities through sin-taxes and regulation. So the analogy to financial services seems inapt regardless of the comparative percentages. Further, pro sports does not occasionally blow up the economy, while the taxpayer's not about to bail out MGM.
Actually finance has hit a high of 24% of GDP last in 2008, as pointed out by George Soros. Agreed we Wall ST sucks up alot of talent, kids that could have been doctors and so....
Funny thing, George Soros, has been pitching his theory of reflextivity for two decades now, and it it seems that the cabal has actually been using his theory fully for about the same time.
Soros had it so right. He now predicts a bigger crash with 8 years.
He's right about that. 2007-2008, which could have been a nice cleansing enema, will now be only the appetizer for the gut-twisting agony ahead.
Where'd he get that figure? The biggest number from the BEA is for 'Finance, insurance, real estate, rental, and leasing' (2006 high of 30.380% of GDP), and that includes all of real estate, rental and leasing (>12% GDP).
Agreed. We need that talent in our military.
If changes do not happen soon enough a slow tortuous societal decline continues because the new socialist goverment with fascists leanings cannot sustain the former capitalistic free market way of life.
If it happens too quickly, we enter a depression that rocks everyone to their senses more quickly, but with a much more devastating short term result.
Some changes that need to occur:
Don't worry about money for reelection. It will take care of itself. The sooner lobyist and special interest are stiphened by law in their contribution capabilities, the better for the masses.
End the war and use the money saved to help support the veterans with jobs and entrenpreneurial grants.
Over time, creative destruct the military industrial complex companies and the bank derivitive departments into more life enhancing ventures supported by the incredible brain power presently being wasted and used for negativeity.
They could help in the development of a new technological boom to support free market growth.
Some obvious areas needed for future survival are safe (small and large) efficient nuclear reactors. Without a sustainable energy source there will be no GDP growth.
Scientifically understanding our universe, and then implementing research that create viable companies that offer employment in companies that create things that are useful, not destructive.
socialist government with fascists leanings = national socialism
"...capitalistic free market way of life."
Peter G. Peterson, right? Where do you ever find the time, what with all those escort services you patronize and all those billions you have to spend, to post here???
Great to hear from you, big guy, and say hello to David Rockefeller for me, huh?
Who the fuck is peter Peterson, and I wish I had billions to spend, or for that matter millions, or for that mattert housands...
Wasn't it French banks that tooted the horn that iniciated the panicked frenzy ?
ONE BY ONE, BILLION BY BILLION:
http://williambanzai7.blogspot.com/2010/04/way-of-squid.html
So the cover of NY Times today states that Goldman actually made some money on this transaction, 51 million or so. Wake the fuck up people!!
It was actually like 7 billion they shorting subprime. It says so In their auto biography. "The Partnership" page 666, Lloyd Blankfein.
In fact, Vinair issued a top down command to the 12 traders of the mortgage dept to sell 10% across the board! That ought to get the avalanch started.
Why cant you people see it? Not only did GS know these CDOs were going to blow up, but guanteed it when they crashed the sub prime market by selling 10% of their inventory.
How many of their clients made money shorting subprime? ou think it was just Paulson?
I have put online a few chapters from the book "the Partnership" for your inspection. http://goldmansachsrules.blogspot.com/
That's interesting, but the case doesn't have anything to do with whether they made money or not.
So what if the armed robber hit a drug store with only $50, but the bullets, the mask and the gas for the getaway car cost him $60.
:) still the beat (umm stick or drum) goes on
http://www.reuters.com/article/idUSTRE63M4U820100423
The Day of the Committee is near. Appropriate soundtrack -- songs for GSers to hum
-- on the way in:
And I could purge my soul perhaps
for the imminent collapse...
-- coming out:
Some dreams are best forgotten
passed on from ripe to rotten
bewildered and besotten
soaked up in balls of cotton...
The rating agencies along with Basel II are to blame. GUess who was the biggest investor in Moody's at that time - Buffet. Rating agencies were protected by corrupt politicians. THe street knew it was playing a game and Goldman was just a little better at it than most.
Tyler - John Maclaughlin just reported that he had research that said that some investors were shorting the Abacus CDO - perhaps from a selling memorandum or 144a registration statement? You have shown incredible ability to get your hands on these types of documents...I suspect you could in this case and ZH might get the first internet Pulitzer...
Basel II and the Theory of Efficient Markets have proved a toxic combination.
First create a construct, claim to believe in it, then arbitrage for maximum profit, hedge your exposure, wash rinse repeat.
Wow, shocked that fab fab was double dipping. Instant gratification by a 27 yr old bsd....say it ain't so.
Only a true euro-douche refers to himself in the 3rd person.....because I believe that a soft and sensual feminine intervention is necessary for Fab's survival.
You do good work Mr.Durden. It has been awhile since i have been this amused on a Sunday morning.
This is a welcome change to Sunday reading fo sho... Says all it needs to say. Especially with one of my personal favorites, the flip between 1st & 3rd...
I know of the crowd that hangs here these types of things really are not shocking although they should be.
But it's worth noting that as the system crumbles and we enter the lean years these kinds of defects become blatantly obvious. When times are bad the system reveals all, especially the fraud, somewhat like the tide going out lays visible all that was previously hidden from view. And so, the seemy underside of these crooks begins to make its way into the media for all to see.
Let us pray it will be their undoing.
Tyler posted something important last week, and I think we all missed it, the leaked next year budget, leaked as in handed to their favorite press toady, but whatever. The biggest line item was 331 Billion in new "fees" on TBTF banks. That's the squid, and the squidlettes!
OK, I know what you're thinking. That's the place holder for the VAT. Has to be. How else do you get a number like 331 Billion except from a policy wonk at the CBO?
Ran this past a couple of drinking buddies yesterday, and they had a different take. This is fun. What if this is real?? What if Obama wants to feed the nation on calamari for a while? How could that happen?
1 Obama is not a team player. Every parasite and union thug in DC is foaming at the mouth over a VAT. Is Obama on board? Maybe not. It's regressive and political suicide, and he's been throwing his own under the bus lately.
2 Dictators instinctively hate alternate sources of power. What happens in Russia when an Oligarch says that Putin is short, ugly, and his momma dresses him funny? Hell to pay, but this time is different. Right?
3 Obama never worked for the squid. Oh yeah, he never worked anywhere, but let's move on.
4 Obama is a few fries short of a happy meal. OK not specific, but I'm not the first to note that there is no core belief system to this dude, or at least nothing anyone dares discuss. He is more Bolshevik than Democrat. The only thing he does well is attack. He hammers any opposition with arrogance and black racism, but that routine has whiskers.
I'm still betting on a VAT, but wouldn't it be nice? With all due respect, if this starts to go down please don't applaud or gloat too much. We should all remember Napoleon's maxim. When your enemies are busy destroying each other, do not intervene!
a very wise maxim to remember. tell your drinking buddies they got some good psychoanalytic skills.
No, the guy is clearly smart. He made money from stupid people. There is no excuse for buying a product you don't understand. I don't care how good the product is, if you don't understand the basis of the cashflow formation, you shouldn't buy the asset.
I wonder, in CDO^2, do you get to read the documentation for the outside layer as well as the documentation for CDOs that make up the base? That's a lot of reading!
I had advanced derivative theory last year and CDOs to the power of x was one of the topics.
Suffice to say, the math gets so complex after the 1st square, that later on youre basically assuming the square of the assumption, which of course in essense turns out to be another assumption that is magnified by X degree.
To say anyone but a math PhD understands the complexity behind those things is not an understatement. Financiers can package, trade, and sell them easily, but dont try and ask anyone besides the back-office mathematicians what each individual CF can be valued at.
It's difficult to improve on a name like Fab. But, perhaps it will evolve:
Fabrice
Fab
Fab Fab
Con Fab
Con Con Fab Fab
confabulate definitioncon·fabu·late (k?n fab′y? l?t′)
intransitive verb confabulated -·lat′ed, confabulating -·lat′·ing
Etymology: < pp. of L confabulari, to talk together < com-, together + fabulari, to converse: see fable
Related Forms:
+1
Next DOW key resistance is 11,250/300
If that level is penetrated next target is 11,900
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
Lesson #1: Never use company email for personal reasons.
Lesson #2: Unless you're running the place always expect YOU will be the scape goat.
Lessen #3: I will say it again never use company email for personal reasons....never.
Especially if you are running the place!
never write anything that you do not want known to public, no text, no email - personal or business...if you have ever used your personal gmail for work, to send a copy of something, when work system was down for an hour etc....your personal email will be looked at also...your texts are all there for looking years years from now...ask Abramoff...his texts alone got him convicted...I'm sure InstantMessaging the same...don't leave personal voicemails, they get recorded on hard drives....I figure, if you are not under active investigation, best bet for personal stuff is on phone, that is likely gone when conversation is done, not to be datamined years later...or preferably not at all on company anything...
Maybe Fab gets Tigered, and his babes start talking.
Remember how the Enron guys were having fun with grandmothers in California? Didn't Fab mention something about widows and orphans?
Eliot Spitzer: "Never write when you can talk. Never talk when you can nod. And never put anything in an e-mail."
Coco Chanel said that a woman need be only two things: Classy and fabulous. Sorry, Erin.
http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=180487
Damn-it, I have been to the AngloGold Ashanti mine in Obuasi, Ghana many times, just incredible. Now I know how AngloGold got its foothold in Ghana. This has to be one of the greatest thefts of all time.
Here's some video I shot on my last trip to Ghana, check out the visible gold vein at 1:50-ish, it is massive, this is at the 800 foot drift.
http://www.youtube.com/watch?v=CAaOYjHb9K0
Specifics of Wall Street arrogance are always helpful, truth is these types that do Enron energy market manipulation/accounting fraud knowing but not thinking about what it does to say, to the businesses in Cali that suffer brownout after brownout and get hosed on their energy costs...these types, like the Fabulous Fab, are not like most other folks. Most folks don't do this kind of heartless stuff, primarily because most people are not given that the power/opportunity, but also, lots of decent people just walk away from crap like this and go on to do real jobs...not everyone likes to screw widows and orphans....
but I really think Fabs emails are excellent example of what these types are like, that a science study explained to me....the more power and entitlement a person felt, the lower their moral standard were for themselves but also the higher their intolerance of others moral lapses, they felt entitled to cheat, break rules but also with entitlement and power, they get hyper about others morality, they think other people should behave perfectly, there is no gray zone for others morality, they can not slide, slightly cheat etc...
so: power creates hypocrisy, absolute power breeds absolute hypocrisy
when i was growing up in the boy scouts, the grey wolf was the pack leader, aka Akela, now it seems he got other boys to use an abacus in all sorts of ways.
http://www.reuters.com/article/idUSTRE63M4U820100423
"Goldman's paw prints were all over this," said Tavakoli. --- Oooh...that was baaaad.
Webelo scouts alright.
In France, cheating is a national sport. As far as CDOs being "intellectual masturbation", all trading activity is "masturbation" when you really think about it.
Naughty Tyler!
DavidC
Tourre's lawyer is Pamela Chepiga.
Pam goes back to the eighties and trials involving the likes of Ivan Boesky, but her name may be familiar to some here for other reasons:
Lawyers sue U.S. government for 15 Guantanamo detainees from Yemen
"All of the 15 Yemenis were detained in Pakistan, said Pamela Chepiga, a lawyer with New York-based Allen & Overy, the leading law firm on the case."
http://www.usatoday.com/news/washington/2004-07-15-gitmo-lawsuit_x.htm
heh. I would have thought a run for Mary Jo White in this spot would be his move.
SullCrom, A&O on Goldman Fraud Case
http://lawshucks.com/2010/04/sullcrom-ao-on-goldman-fraud-case/
Pam's hubby Mike works over at Simpson Thatcher and in that capacity is connected with Goldman
Results 1 - 10 of about 1,650 for "Michael Chepiga" "Goldman Sachs"
http://www.google.co.uk/#hl=en&source=hp&q=%22Michael+Chepiga%22++%22gol...
still waiting for an answer (tyler).