

Goldman’s Rules of Acquisition - rpledge
http://calacanis.com/2010/05/03/goldmans-rules-of-acquisition/

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simon_
I am so tired of hearing about "confounding financial products that no one can
hope to understand".

An intelligent person willing to spend a few hours would have no trouble
gaining a basic understanding of CDOs, credit default swaps, and the like.

There's no excuse for that kind of thing in mainstream journalism (where you
often see it), and I'm kind of surprised that you hear it from Jason.

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j_baker
_Warren Buffet_ has said he doesn't understand CDOs. If he doesn't understand
them, I think most people can be forgiven for not understanding them.

~~~
anamax
> Warren Buffet has said he doesn't understand CDOs.

Buffet has also said that he doesn't understand tech companies or computers.

Buffet is always playing angles. When you can't spot the angle, he's probably
playing you.

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jarek
I'm not a big fan of GS, or the current finance setup. That being said:

"These bastards are reveling in their financial mischievousness – they’re
enjoying explaining exactly how they fucked us."

If you go up against people who are smarter than you, and greedier than you,
and who know more than you, and you trust them not to fuck you, they will fuck
you.

That's capitalism.

~~~
j_baker
However, that doesn't make it right for them to fuck you. That's ethics.

~~~
anamax
> However, that doesn't make it right for them to fuck you. That's ethics.

The folks who lost were planning to keep their profits. They thought that they
knew better than the other side of the deal. (And yes, there's always another
side.)

You can't con an honest man.

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LiveTheDream
_It feels like Wall Street's moral benchmark has fallen from Gordon Gecko's
credo, “greed is good” to "well, it’s not illegal."_

Well said.

~~~
joshu
Heh. I've always thought of exotics as transactions that weren't illegal...
yet.

~~~
jrockway
There's really no correlation. You can do pretty dangerous things with vanilla
options, and some exotic options are pretty tame.

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gsmaverick
Unfortunately like many others Jason is mis-informed about what was really
behind this crisis. Let's not forget that the Federal Reserve has been
maintaining exceptionally low interest rates for much of the last 10 years,
with a few exceptions, and that both previous presidents cheered the rapid
increase in home ownership rates seen in the early parts of the new
millennium.

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joelhaus
Don't expect things to change any time soon. The problem is systemic, on a
global level. This is not just GS; they only happen to play the market better
than most.

Banks have an incentive to take on greater levels of risk in order to attract
deposits (which are a highly liquid, short-term source of capital); hence,
investors must find a way to out-do the bank returns in order to justify their
existence.

People can point to specific flaws within the system (of which there are
many), but we live in a global economy with many banks competing for profits.
Given that the possibility of eliminating greed is near zero, this really is a
catch-22.

Global regulation ( _see the Basel Accords_ ) would result in significantly
diminished economic growth, but is the only viable "solution" (you can begin
to see how Marx justified communism).

Result: the global banking system tends not to incentivise long-term
investment, which then leads to asset bubbles. While we can not prevent
bubbles all together, regulatory regimes can help to make them less frequent.

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dnsworks
Has Calacanis ever written .. anything that didn't mention that he's wealthy
enough to drive a Tesla?

