Tuesday, September 30, 2008

Whaddaya Know?!

clipped from www.qando.net
Think of the mortgage securities market as the World Series of Poker. In fact, a
great book about it is Liar's Poker, by Michael Lewis. Lewis was a trainee at
Salomon Brothers, and he learned phrases like "Big Swinging D___," which
describes a swaggering, aggressive mortgage banker. Henry Paulson fits the
model.

The best players in this World Series of Poker are the folks at
Goldman.
Buffett just bought a stake in Goldman. That stake would be a lot more
valuable if there were actually a poker game—that is, if mortgage securities
were still trading. Right now, they're not trading. So Goldman is sitting
there ready to play and no one is ready to play with
them.

Along comes Uncle Sam, who wants to take a one-hour lesson
in poker and then sit down and play in the World Series with $700 billion in
chips. And whaddaya know? Warren Buffett thinks Uncle Sam really has to get in
the game.
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