5.11.2010 A Conversation about the Goldman Sachs Hearing

This is a conversation (spell checked and minor grammatical corrections) between a friend of mine who works in the business of Politics. As I have helped him in the past understand the arcane uses and abuses of CDOs, MBS, and other methods of saying one thing and doing another in the financial world, I hope that my 4 readers* will find the following exchange insightful. I apologize for the profanity. People with jobs in politics tend to swear.

T***: Also, they adopted the Sanders (modified) amendment, but rejected a more fulsome audit of the Fed

Me: ah.

More fulsome?

It is really just despair. I think this expresses it well: https://self-evident.org/?p=820

T***: The Sanders audit is limited to info on who they gave money to in the last 3 years

The rejected Vitter amendment is a full audit, including minutes

Me: I mean, it isn't rational, insofar as I have no evidence for this, but I just feel that data points will be used as cudgels, either against the central bank or against specific banks, while leaving the bigger picture/necessary adjustments unaccounted for.

T***: That is a f****** stupid article

Me: I mean, the Goldman senate hearings were a laugh

Look, I like Barney Frank as much as the next guy

But he is more the exception, imho

T***: Seriously, absolutely pig ignorant about how hearings work

No, seriously, that is f****** retarded

Those questions were literally all written by public interest groups

And the audience sure as f*** wasn't Wall Street analysts

They were all political questions made for a political point

Me: right

A political point which purposefully missed the fundamental purpose of the financial system.

T***: Using them to gauge the knowledge of the market among senators (and really, about Senate staff because who gives a f*** what senators know?) is retarded

The writer of this is far more ignorant about how Congress works than the average senator is of the market

It is garbage

Me: I mean, I suppose it is silly for me to expect that a hearing should actually be an attempt to inform and clarify, let alone that the tone and tenor of the hearing will influence the crafting of legislation

T***: Yes

That is absolutely ridiculous to expect

Me: so you are saying that I should ignore the hearings? and that anyone involved has no input on the financial regulation in the pipe, and that the knowledge level that their questions implied in no way represents the knowledge level of the people actually crafting the regulation of the financial sector?

T***: Pretty much! You should basically treat them with the importance that you would treat a company’s press release regarding upcoming litigation

It is all posturing

And again, the questions don't come from the members about 90% of the time

They come from lobbyists

We do that all the time

Writing questions for hearings

T***: The analog between CEOs and Senators and their relevant expertise relative to their respective staffs is apt, except that Senators have more accountability, more diverse backgrounds and a higher level of personal achievement. Considering how s***** senators are, collectively and individually, that is the harshest f***ing burn of CEOs I can muster.

Me: zing