The Perp Walks Begin
Chuck Ponzi June 19th, 2008
I always said we didn’t have a bubble until we had some perp walks. These are from today thanks to Bloomberg:
Ralph Cioffi
Matthew Tannin:
The NYT has a great piece on the indictments of former Bear Stearns Fund managers.
In an April 22 e-mail from Mr. Tannin — which the indictment said was sent not from Mr. Tannin’s account at Bear Stearns, but from his personal account to the personal e-mail account of Mr. Cioffi’s wife — Mr. Tannin wrote:
the subprime market looks pretty damn ugly… If we believe the [CDOs report is] ANYWHERE CLOSE to accurate I think we should close the funds now. The reason for this is that if [the CDO report] is correct then the entire supbrime market is toast… If AAA bonds are systematically downgraded then there is simply now way for us to make money — ever.
Three days later, Mr. Cioffi and Mr. Tannin hosted a conference call for investors in the funds. This time, his tone was very different.
Lying openly like that to garner more money needs to be treated pretty harshly. Maybe some in the securitization business can get some religion. If not, they can always find Jesus in the clink.
From the article:
Just before the fund’s collapse, Mr. Cioffi, who just a year earlier was making an eight figure salary, gave voice to his fears. “I’ve effectively washed a 30-year career down the drain,” he said.
Along with billions of investors’ money not to mention the complicity in exacerbating the nation-wide housing melt-down (not that these guys have anywhere near all of the blame).
I wonder if there will actually be jail time?
Roosters are coming home to crow…. If these boys end up cooperating with the authorites, we’ll see how quickly the chain breaks. As for jail time, it will probably depend on what they are willing to give up or on others to escape any hard time…. It’s too bad they didn’t start with the top brass of the former Sub-Prime lenders… These cats are the ones who started the issue of unstable lending practices by originating these ninja loans and passed them through the multipe structure investments that could end up hanging the balance of our financial system. If they end up doing jail time…. we really should pull together a gift basket with plenty of vaseline and other necessary items to make their stay a pleasent and unpainful event…….. forget it, let the pain begin!
I appreciates Mr. Cioffi, for his great work and as well this blog really full of good posts.