Comments on: Goldman’s outperforming mortgage CDOs http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: moneymonger http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12993 Mon, 29 Mar 2010 23:48:03 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12993 She’s on MSNBC today:

http://www.msnbc.msn.com/id/21134540/vp/ 36088862#36088862

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By: anjalik http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12963 Sat, 27 Mar 2010 20:14:08 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12963 P.S. It’s been about a week since I’ve read it, so perhaps I’m forgetting another important argument or piece of evidence raised. If so, please remind me.

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By: anjalik http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12962 Sat, 27 Mar 2010 20:13:07 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12962 This to me always seemed like a specious deduction. Sure, on page 33, you see that Goldman has had lowest rate of default specifically as of 2008. But on page 26, you see that Goldman drastically cut its CDO underwriting from 2007 to 2008 although it was one of the biggest underwriters in the overall period of 2002-2007 and the second and third largest respectively in 2005 and 2006 when sub-prime mortgages across the industry proliferated in the CDO makeup. Perhaps then, couldn’t Goldman’s comparatively superior performance as measured in 2008 be a result of a quick exit from the market in 2007?
A hypothesis: Maybe, JP just didn’t care about its relatively small exposure to the industry and the 40% default rate it incurred wouldn’t have made them much more money than if only 5% defaulted as Goldman’s did. But, Goldman’s exposure to the market meant it carefully evaulated its position and got out of bad positions just in time, which was reflected in its 5% default rate. Maybe, if the CDOs had defaulted just one or two years earlier, the story would be different.

Has anyone else actually read the thesis? Any comments?

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By: moneymonger http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12957 Sat, 27 Mar 2010 16:15:54 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12957 Watch her on TV:
http://watch.bnn.ca/squeezeplay/march-20 10/squeezeplay-march-26-2010/#clip281603

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By: Felix Salmon http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12939 Fri, 26 Mar 2010 18:22:18 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12939 davidbrentbrent, my response is this: http://twitter.com/felixsalmon/status/11 075199623

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By: davidbrentbrent http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12936 Fri, 26 Mar 2010 16:50:36 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12936 Yves Smith rips AK Barnett-Hart and Lewis a new one in that article:
http://www.nakedcapitalism.com/2010/03/d ebunking-michael-lewis-subprime-short-ha giography.html

Felix, can we expect a response from you on this lively debate?

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By: velobabe http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12927 Fri, 26 Mar 2010 02:48:09 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12927 AK Barnett-Hart was last seen working at Morgan Stanley.
Posted by Uncle_Billy

uhmm i know you. we are just spreading the LOVE⁄

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By: Uncle_Billy http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12926 Fri, 26 Mar 2010 00:43:46 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12926 AK Barnett-Hart was last seen working at Morgan Stanley.

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By: velobabe http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12922 Thu, 25 Mar 2010 23:26:39 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12922 Brandon Adams says
“When I sent him my former student AK Barnett-Hart’s senior thesis, The Story of the CDO Market Meltdown: An Empirical Analysis, he read all 115 pages the night I sent it and pointed out an error that AK or her advisors didn’t catch! This thesis won the award for the best thesis in the Harvard economics department in 2009 and has since been read by hundreds of people. Apparently Michael caught the only error, and none of the material in the thesis was particularly new to him”.
quote taken from:
Debunking Michael Lewis’ Subprime Short Hagiography – 03/25/2010 – Yves Smith

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By: jeff12345678 http://blogs.reuters.com/felix-salmon/2010/03/25/goldmans-outperforming-mortgage-cdos/comment-page-1/#comment-12918 Thu, 25 Mar 2010 20:59:23 +0000 http://blogs.reuters.com/felix-salmon/?p=3078#comment-12918 Wait, isn’t the problem with Goldman that it was creating specific CDO’s that were bound to go bad? If that’s the case, the aggregate performance doesn’t tell you much — if anything, it would be an exacerbating factor. (ie Goldman understood what it was doing generally and produced higher quality CDOs, but for the purposes of dumping garbage on AIG went out of its way to produce poor ones.) Perhaps I don’t understand this.

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