Those Who Are About To Die Salute You!


Goldman Sachs CEO Lloyd Blankfein (pictured right) prepares for his appearance before the Senate Permanent Subcommittee on Investigations Tuesday.

In the meantime, The Financial Times reports that Senate investigators have revealed that, when they were trawling through Goldman e-mails trying to uncover a smoking gun, they often came across the comment 'LDL', and the e-mail trail usually then went cold. 'LDL' turned out to stand for 'Let's Discuss Live', and the implication is that when members of the firm staff got down to plotting the real nasty stuff, they didn't want to leave anything to chance by discussing it electronically and leaving an audit trail.

One banker told Here Is The City, however: 'The idea that 'LDL' signifies that Goldman staffers were involved in a nefarious plot is pure nonsense. The fact is that it's often much easier to discuss complicated ideas and exchange views face-to-face. E-mail does have limitations, you know'.

Another banker agreed, saying: 'If those 'evil folks' at Goldman planned to keep certain discussions / outcomes secret, they didn't do a very good job, did they ? It is, after all, the e-mail revelations that have forced Goldman onto the back foot in this case'.

And yet more e-mails have emerged to sweeten the brew, including one sent by Daniel Sparks, Goldman's former head of mortgages, who wrote in January 2007:

'They structured like mad and travelled the world, and worked their tails off to make lemonade from some old lemons'.

But it's another e-mail that is hitting the headlines now - one sent to Sparks in June 2007 by Thomas Montag, then Goldman's head of sales and trading and now president of Global Banking and Markets at Bank of America Merrill Lynch.

The e-mail in question was sent in connection with a $1bn CDO transaction known as Timberwolf, which Goldman issued in March 2007, and sold on soon after. $300m ended up being bought by the two Bear Stearns hedge funds which subsequently went belly up and ultimately started the run on Bear, which lead to its downfall. By August 2007, Timberwolf had lost 80% of its value, and it was liquidated in 2008.

And a relieved Montag e-mailed:

'Boy that timberwo(l)f was one shi..y deal'.

Finally, Reuters reports that Sullivan & Cromwell Partner Roger Cohen (who is assisting Goldman with the SEC action) said Monday: 'It is appropriate to base judgement (in this case) on the merits and the facts as they ultimately emerge in full, and not to base a judgement on the 'evil empire' theory, which isn't a question of legality or illegality'. Some hope.

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