Saturday, April 17

Abacus 2007-AC1

Goldman Sachs accused, Air Space closed across Northern Europe, Big Brother comes to its end in Britain. Talk about a strange series of events to end the week, none of them, dear reader, could have been predicted - especially Goldman, given how deep they are in Washington's pockets (though some saw it coming when the firm moved to New Jersey. Hello? Tony Soprano?). We know about Goldman alums Hank Paulson and Robert Rubin running the economy and handing away tax-dollars but how about Michael Paese, a Barney Frank staffer who is now Goldman's top Washington Lobbyist? Paese's position formerly held by Mark Patterson who is now the current Chief of Staff at the Treasury. You don't have to be a genius to put those dots together. So here is the pig in the poke: John Paulson (no relation to Hank) knew the subprime market over-valued trash so he went to Wall Street to find a partner who could express his vision. Enter Goldman, who aided Paulson by building a portfolio of shit, Abascus 2007-AC1 and 100 other similar vehicles, which Goldman sold to unwitting pension funds who are the country's workers, families and grandparents. While the pensions anticipated a gain, Paulson bet against it and made $1 billion when Abascus value collapsed; Goldman also took part in the trade. Unlike Paulson, who made his views public, Goldman flogged their product as investment quality without informing their buying-clients that Paulson had selected some of the portfolio's securities. As one trader says, "this is like betting on penalty kicks and not knowing the other guy a goalie." What is surprising about all this that the SEC, who famously flubbed Madoff and, so far, has failed to identify one crooked arrow despite trillions lost since '08, finally shows some teeth going after the biggest bad-ass on the block. Could it be public pressure?

Meanwhile, the volcanic cloud over Britain halts air travel for a fourth day including my trip to Arizona and the Grand Canyon with Eric and Roger. From where I sit now, outside blogging, one would never know the ash - blue skies and warm sunshine, dude. I check London's air quality on the Internets: all clear. Iceland's air-traffic disruption worse than 9-11 and the first time ever travel has come to a similar grinding halt. Pity those poor souls trying to return to London: the Eurostar over-sold for days; ferries jammed and the Chunnel not taking new bookings until next week. In short, enjoy the holiday. One benefit: no planes overhead and the birds chirping.

And finally Big Brother, launched by entertainment company Endemol in the Netherlands and arriving in Britain the following year. By 2000, the entire country mesmerised by the idiocy of a bunch of morons trapped inside a habitrail making nasty. Of course we, the viewing public, empowered with the ability to boot the worst characters from the show. I recall walking in Maida Vale on a sunny day reading the dailies which all covered the final episode - the entire country Big Brother and I was just cluing in. Weird, man. Like those busted venture firms or crappy funded Internet companies ( any one?), Big Brother one awful hang-over from that indulgent period when people's ability to be mean and caddy went public. I saw this first hand with my piece-of-shit business partner, may her career RIP. So to Big Brother I say: Good bye and stay buried - and all you dumb schmucks who made it popular - may you own a bit of Abacus 2007-AC1. You deserve it.

Photo from Getty Images. Volcanic ash BTW consists of tiny, jagged particles of rock,minerals and volcanic glass. These fragments range in size from 0.0004 to 0.08 inches, or roughly the diameter of a grain of rice.