Comments on: John Thain comes clean A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: S McNally Fri, 16 Oct 2009 19:46:26 +0000 It certainly boggled Thain’s brain!

As for OSMR, the word is not just shame, but sham!

As for not having a clue, KenG, Thain was head of the mortgage desk from 1985 to 1999 at Goldman Sachs, and president and co-chief operating officer there from 1999 to 2004, and CEO of the New York Stock Exchange from January 2004 to December 2007, where he laid off THOUSANDS of people, THOUSANDS. Including a lot of people who might have had a clue….

So when we look at all the bad debt due to defaulted mortgages, let’s also thank Thain, who was responsible for the free-for-all environment that ‘valued’ these things as worth something, a notional number on paper only, and which we then tried to ‘prop up’ with REAL dollars, not notional ones, from the hardworking American tax payers.

The guy lies like a rug, AND is incompetent too.

By: Jonathan Ford Thu, 08 Oct 2009 15:11:37 +0000 I have nothing against the logic of the argument. But I think it is unforgiving. Surely how one judges Thain’s recent comments should depend on what one thinks he was trying to say. Of course, you could just see it (as Felix does) as spurious wisdom after the event, but you could also see it as a mea culpa. And in that case, surely the correct response would be that of Luke 15.7: “Joy shall be in heaven over one sinner that repenteth, more than over ninety and nine just persons, which need no repentance”.

By: jkingqm Thu, 08 Oct 2009 02:38:36 +0000 “But one does not need any model to see the conceptual and ethical flaws of CDO, the slicing and dicing. ” posted by The Real Deal

Real Deal, could you please explain the ethical flaws of CDO?

By: OSMR Wed, 07 Oct 2009 21:00:15 +0000 What a shame that there was ‘no chance that pretty much anybody understood what they getting paid’ to market those CDOs. In contrast, those numbers were very tangible.
Bring on the civil suits and criminal charges.

By: blackbean Wed, 07 Oct 2009 18:35:01 +0000 No CEO or any executive staff should say they did not know or have an idea about how bad these ‘assets’ were. If it’s commonplace in the daily news to read about people with undocumented incomes of getting $500K loans, well, you don’t have to be very smart to figure it out. You just need to read and not listen to the majority’s opinion when you make up your mind. John Thain knew. But why blow it if you’re making millions?

By: martin braun Wed, 07 Oct 2009 18:22:52 +0000 If John Thain is as clueless as he now freely admits; what does that say about the talents and smarts of everyone else in the financial industry?

By: The Real Deal Wed, 07 Oct 2009 18:15:25 +0000 It’s not the computer. It’s the model. It’s who designed the model and how it’s designed. The rationale, the mathematics, the algorithms, the assumptions.

But one does not need any model to see the conceptual and ethical flaws of CDO, the slicing and dicing.

If a bunch of PhDs present a CEO with broad sense of business and ethics, with financial products based on such a concept, it would be rejected within 2 seconds. But none of the big investment bank brass did. Because they don’t operate using such senses or ethics. When they believe they are master of all, emperors of empires, then nothing else matter.

Is not surprising that John Thain, even now, finds it impossible to understand basic values of business, humanity, ethics, responsibility.

Just a G W Bush finds it impossible to comprehend anything beyond his idiotic fundamentalism of black and white.

Absolute power within primitive brains corrupt and destroy absolutely.

By: KenG Wed, 07 Oct 2009 17:41:25 +0000 I don’t think Thain was lying when he kept saying “this is the last write-down”, I think he had no clue about the depth of the problem, just like his predecessor and many others in the industry. Computer models exist mainly to justify what those execs wanted to do, which was to ride that gravy train as long as possible, and if it crashed, be able to escape with a outsized package (like Stan O’Neal, the guy before Thain).

@dmo, thanks for bringing Kernighan into this discussion. It’s nice to be reminded of a world ruled by logic and reality.

By: Cardiff Wed, 07 Oct 2009 17:35:42 +0000 My comment was poorly worded and vague. To clarify, I meant that Thain’s behavior as CEO was misleading to the extent that he expressed confidence in Merrill’s understanding of these securities. I didn’t mean to imply that Felix’s post was misleading–it wasn’t.

By: dmo Wed, 07 Oct 2009 17:12:09 +0000 There is a quote regarding debugging computer programs by Kernighan that goes:

“Debugging is twice as hard as writing the code in the first place. Therefore, if you write the code as cleverly as possible, you are, by definition, not smart enough to debug it.”

I think “writing the code” could be replaced with “building financial instruments” and “debugging” with “assessing risk”