Michael Burry’s FCIC Testimony – Audio

http://fcic.law.stanford.edu/interviews/view/14

Delving into the Financial Crisis Inquiry Commission’s interviews

http://fcic.law.stanford.edu/resource/interviews

If you have not already listened to or read some of the transcripts of the Financial Crisis Inquiry Commission’s analysis into what caused the mortgage mess, take a look. Clearly some of the interviews provide a lot more utility and value than others; there are some participants that have nothing to lose and want to contribute to the exchange like the guys formerly at Deutsche Bank, Greg Lippmann and Eugene Xu. Michael Burry – have a read of The Big Short (by Michael Lewis) for further details regarding him also contributes to the inquiry. These are individuals who made a lot of money by being on the right side of the trade so their insights are imperative. Others such as Blankfein are playing a game, mixing some truths among many lies; all the investment banks were leveraged with toxic junk to the stratosphere; Blankfein has to pretend like they didn’t know as well; well they didn’t for a long period of time, but they realised just before the rest of the herd did, and were able to short change clients like the Abacus deal totally oblitering any fiduciary responsibilities they were supposed to have.

It’s an interesting collection of interviews; it is easy to comment now with such hindsight but those who were able to profit from the mess with such accuracy have every right to re-tell these generational events; to discuss cause and effect. While it has taken 18 months to culminate these findings, a few of these guys could have saved the Commission a lot of time reading ‘Learn Derivatives in 24 Hours Guaranteed!’, ‘Trading for Dummies’ etc., without having to persist with spending so much money and energy in generating findings whose future value is unlikely to be exercised. The inquiry was essentially an event in blame transfer; to ensure regulators and the government at large were not to be held accountable for their complete absence of oversight and inaction; and to mitigate any negativity they received by offsetting that with a greater public frustration at Wall Street; directly at the major firms that underpin this community. What I find most striking is the lack of prosecutions, or, at least, trials of those individuals who committed fraud; it is peculiar that Chris Dodd and Barney Frank, two of the individuals that orchestrated the crisis by proselytising the GSEs, and their federally mandated guarantees of toxic trash are now framing the new legislative works; are things upside-down or is it just me?

Former Deutsche Bank AG trader Greg Lippmann

The former Deutsche Bank AG trader who made timely bets against subprime securities.