Persistence

Part of the ritual for opening the lake house is checking the answering machine.  Most of the messages are hang-ups or automated calls, and there aren’t many.  So it was a surprise today to hit the listen button and hear the recorded announcement “you have 23 new messages.”  A quick scan showed that over 20 of the them were for David Randall from GMAC.  In other word, debt-collection calls.  While I am David Randall, I am not the David Randall GMAC had been patiently hounding for the past seven weeks.  The callers were indeed patient, leaving their names and numbers with at most a hint of exasperation.  I have no responsibility to tell GMAC it is pursuing the wrong pup but I have no desire to continue to receive deadbeat David Randall’s dunning calls.  GMAC is open until 8 pm and one quick call convinced it to remove my number from its database–until it trees another phantom namesake in my Maine phone number.

Put Up a Parking Lot

Classes ended yesterday.  I went to Maine today, my first trip north in almost two months.  I planned to get on the road by 11:30, a plan as successful as most of my scheduled departures–which is not successful at all.  I worked all morning, making progress on some stalled projects, doing laundry, packing the car, and pulled out the driveway at 1:50 pm.   Leaving then, before rush hour on a non-holiday weekend, should have meant arriving about 4:30, plus whatever time I spent shopping for groceries.

I got here at 7 pm.  A tractor-trailer fire on the Maine Turnpike between the York and Wells exits stopped and backed up northbound traffic for miles.  I mean cars-parked-in-the-middle-of-the-highway, dogs-being-walked-in-the-breakdown-lane, w-t-f-is-going-on stopped.   I sampled everything the experience offered.  I let the dogs roam the grass beside the road.  I  strolled southbound and commiserated with fellow travelers.  I made phone calls, checked email, and went to the Maine Turnpike website for news.  I considered a power nap.  It was like the New York Turnpike at Woodstock minus hippies, rock music, drugs, rain, and fun.  Duty made me open my laptop to write exam questions.   Two or so hours after stopping we all started up and began slowly to move, miles of cars, motorcycles, RVs, trucks, buses, flatbeds, and wreckers.  We crawled for miles, three lanes of traffic squeezing left into one lane to pass the accident site.  And what a sight:  a small, charred, twisted pile of metal identifiable as a tractor-trailer cab only because it was hitched to the burned-out hulk of a trailer.  I don’t know if the driver or anyone else was hurt.

To Be 19 and Ignorant

Texas community college freshman Kelsey Gloston did not want to fulfill jury duty.  Called with 59 other prospective jurors to federal court in Houston, Gloston ignored the summons.  When the court clerk called to ask where she was Gloston blamed her absence on a flat tire.  When the clerk offered to drive her to court she said she was going to class instead.  When the clerk called back to say the judge himself wanted her in court the next day to explain herself, Gloston “repond[ed] rudely and hung up.”  The following day U.S. Marshals “rounded up” Gloston and brought her before Judge David Hittner “in ankle and wrist restraints . . .  wearing flip flops, a tight white T-shirt, short-shorts and sporting green streaks in her hair.”  The angry judge said “I’m going to hear exactly what your problem is with jury duty and what your problem is with how our country operates. . . . Nobody hangs up on our people.”  Judge Hittner released Gloston on instructions that she appear with a lawyer the following day for a contempt hearing.  Gloston appeared as ordered, apologized for her disrespect, and was let go with a lecture and a copy of the Constitution.  At first Gloston’s father planned to sue–of course–and blamed the judge for overreacting, saying of his daughter “she’s 19, she’s ignorant, she’s a kid. They don’t take anything seriously.”  (Way to have my back, Dad!)   Now he’s happy to put it behind.

Men Behaving Badly

Sometimes I just don’t know what to say.  Philip James Conran of West Hartford, CT faces various criminal charges after he confessed to placing a Craigslist ad titled “Looking for lust,”  seeking multiple partners to fulfill a group-sex fantasy–and providing the address of a neighbor with whom he was feuding.  Strange men started driving past her house and parking on the street; strange and bolder men knocked on her door.   She called police, who tracked down the accused through Craigslist and his ISP.  One respondent went to the wrong address and fondled a teenage girl. Police arrested and charged him with sexual assault and other crimes.

There’s a depressing amount of vile behavior in this little story.

Lone Tulip

We’ve had terrible luck with bulbs.  Frost, squirrels, neglect, and other natural hazards killed most of our bulbs each year. We gave up trying.  A few lonely tulips struggle on.  Saturday I saw Cleo sniff and take a preliminary nibble on these petals.  I shooed her away and snapped the picture before Cleo could finish it off.  Apparently it didn’t meet Cleo’s exceptionally low edibility threshold.  The tulip blooms yet.

SEC Sues Goldman for Fraud

The SEC’s civil fraud suit against Goldman Sachs and Goldman employee Fabrice Tourre, filed yesterday in federal court in New York, alleges the defendants made “materially misleading statements and omissions in connection with a synthetic collateralized debt obligation (“CDO”) GS&Co structured and marketed to investors.”   The structured-investment’s value was tied to performance of a portfolio of subprime mortgages selected, according to Goldman’s marketing materials, by ACA Management.  According to the Complaint Goldman failed to disclose to investors that hedge fund Paulson & Co., Inc. “played a significant role in the portfolio selection process” while maintaining “economic interests directly adverse to investors”–in other words, while shorting the portfolio.  The SEC alleges Paulson entered into credit-default swaps with Goldman on specific tranches of the CDO.  According to the complaint Tourre was responsible for structuring the investment, knew of Paulson’s undisclosed short interest, knew Paulson’s role in selecting the portfolio, and misled ACA that Paulson had a $200 million equity stake in the deal.  Goldman earned $15 million in fees for structuring the investment.  Six months after the April 2007 closing 83% of the portfolio’s mortgages had been downgraded; by January 2008 downgrades stood at 99%. The SEC alleges investors lost over $1 billion in the deal, while Paulson made over $1 billion.   Goldman called the complaint’s allegations “completely unfounded” and claims its long position lost over $100 million.

The 22-page complaint crisply describes structured securities, synthetic CDOs, compromising internal correspondence, and this entertaining email from Tourre to a friend three months before the deal closed:

“More and more leverage in the system, The whole building is about to collapse anytime now. . . Only potential survivor, the fabulous Fab[rice Tourre]…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!”

In another email before the deal closed Fabulous Fab wrote “the cdo biz is dead we don’t have a lot of time left.”  All together the complaint paints an ugly picture, but that’s what complaints do.

Why is Paulson not a defendant?  Because Paulson did not communicate anything to investors.  Investor disclosure, not deal structure, is the heart of the alleged fraud.

US News Speaketh

A headline that hardly needs a story attached:  US News Warns of Tough Times for Law Grads; Expert Says ‘It’s Just Like the Lottery.’ This ain’t news but since it comes from Rankings Mania Central it will have legs.  Jobs are down, tuition is up, loans are harder to repay.  Among the grim tidbits:

According to a separate “Tips and Stats” article, first-year associates at large law firms can expect to make $106,500 to $131,250, down 5.1 percent from last year. At midsize firms, associates can make between $71,500 and $100,750, and at small firms they make make $49,750 to $73,000.