The Hunt Is Open

To those involved with the sale of bad CDOs to investors in the past few years, beware — the Securities and Exchange Commission might be coming after you! Karma’s a bitch, huh?

From the mouth of 31-year-old Fabrice Tourre, a Goldman trader who sold a collateralized debt obligation on bad faith in 2007: “Only potential survivor, the fabulous Fab … standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!”

Poor fellow, he’s smart enough to have graduated from Ecole Centrale Paris and Stanford University, but stupidity comes in many forms. Whatever may happen to Tourre’s career, I wonder if he would appreciate listening to Elton John’s song “I’m Still Standing.”

This deal reminds me of that sketchy transaction between Tishman-Speyer and BlackRock’s lead purchase of New York’s Stuyvesant Town-Peter Cooper Village apartment rental complex for $5.4 billion from MetLife Inc. in 2006. As the value of that property plummeted in the following years, each of those companies stood to have lost just $112 million, while larger investors lost hundreds of millions of dollars more.


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