From the
Atlantic report again:
"In November 2007, Verschleiser wrote
to his risk committee that he knew
insurers for mortgage securities were going to have big financial problems. So he suggested they multiply by ten times the short bet he'd just made against stocks like Ambac. These e-mails show Verschleiser's trading
desk bragging to firm leadership that he
made $55 million in just three weeks, by shorting the insurers' stock!"
So in essence, Verschleiser was
triple-dipping. First he was selling
worthless "sack of sh*t" bonds to investors, by representing them as "good
investments." Then, he kept the money
from the return sales of the "wormy apples.'
And then, on top of that, he made money by betting against the insurers
he was sticking with these toxic assets !
The cost of all this to the rest of us
We all know
what happened from there. Bear Stearns
went under, thanks in large part to the many, absolutely crooked schemes like
Verschleiser's -- and all the rest of us
were forced to pick up at least part of the tab as the Fed spent billions
subsidizing Bear's emergency takeover by JP Morgan Chase. (In subsequent litigation, Chase has
steadfastly refused to buy back the bad mortgages dumped on investors by the
likes of Verschleiser, and has fought tooth and nail to prevent the information
in the Ambac suit from being made public.)
Ambac went
into Chapter 11 bankruptcy in 2010. Ambac
and other insurers, like MBIA, suffered for having insured worthless mortgage
bonds sold onto the market by the Verschleisers of the world. Ambac asserted in its suit that it paid out
over $641 million in claims related to the shitty bonds from the Bear deals.
In spite of all this, Verschleiser landed
happily on his feet
Surprise,
surprise, this crook now heads Goldman Sachs' mortgage division! And after
cutting a mile-wide swath of losses through the American economy, helping
destroy two venerable firms (Bear Stearns and Ambac), and bilking the taxpayer for untold
millions, he is also named in a lawsuit filed by the Federal Housing
Finance Agency for allegedly speeding bad loans onto securitization before they
defaulted. And now, instead of being in jail where he belongs, Verschleiser is living the contented life of a proud family
man, having recently rented out a posh 94-room hotel in Aspen for three days,
for his dear daughter's big party.
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