Tuesday, December 25, 2007

Greg Lippman

Greg Lippman, Deutsche Bank AG trader
Aka 'Shittman'
It took all sorts of individuals and corporations to create the housing bubble. Here is what seems to be a 'Number 1 Asshole' in creating the 'Financial Engineering' behind the debacle. As he puts it, "subprime problems are what they are". Yes, they are a piece of shit that you helped serve up. Bravo, shithead!

2007-12-17: Subprime Securities Market Began as `Group of 5'
Lippman disputes that the derivatives the group of five helped create -- which banks packaged into CDOs -- caused the subprime crisis. "The problems in subprime are what they are and derivatives did not cause them,'' Lippmann says. "Derivatives enabled more CDOs to be created and the stakes to be bigger. But the transparency made people realize the problem faster.''
2002-12-15: Lippman Wedding (interesting backgrounds in his family)
Her father is the research director for Integra Realty Resources of Southwest Florida, real estate developers in Naples. Her mother retired as a financial consultant in Fort Worth. His father, now retired, owned the DBL Operating Corporation, a former real estate investment and management business in New York.
This is the first part in a five-part story on how Wall Street transmitted southern California’s go-go mortgage lending practices and the inflated U.S. real estate market into a global financial crisis.

Part 1: Over take-out food, traders set Wall St.’s subprime debacle in motion
Representatives of five of Wall Street’s dominant investment banks gathered around a blonde wood conference table on a February night almost three years ago. Their talks over take-out Chinese food led to the perfect formula for a U.S. housing collapse.
The host was Greg Lippmann, then 36, a fast-talking Deutsche Bank AG trader who aspired to make mortgage securities as big a cash cow for Wall Street as the $12 trillion corporate credit market.
- Rajiv Kamilla, a trader at Goldman Sachs Group
- Todd Kushman, who led a contingent from Bear Stearns

Deutsche Bank continues CDO Expansion
New York, April 5, 2005
Deutsche Bank Securities Inc. announced today that Richard Rizzo will join the Firm's Collateralized Debt Obligations (CDO) Group within the Global Markets Division next month.

"Our ability to enhance and increase trading in the secondary market is a vital part of our CDO business. "

Deutsche Bank appoints Greg Lippmann Global Head of ABS Trading & Syndicate and CDO Trading
New York / London, June 12, 2006
Deutsche Bank today announced the appointment of Greg Lippmann as Global Head of Asset-Backed Securities (ABS) Trading and Syndicate. Deutsche Bank today announced the appointment of Greg Lippmann as Global Head of Asset-Backed Securities (ABS) Trading and Syndicate. Lippman is based in New York and reports to Richard d'Albert, Managing Director and Head of the Securitized Products Group (SPG).

Lippmann joined SPG in March 2000 and has been instrumental in developing Deutsche Bank's ABS and Collaterized Debt Obligation (CDO) platforms.

"Greg has been instrumental in building-out our securitization trading and syndicate capabilities in the U.S. and globally over the last six years. He is highly regarded in the industry and has become a pioneer in developing new products and trading platforms for the market," said d'Albert. "With these appointments, we are positioned to build upon past success and further enhance the strength of our SPG platform."
Uhhhhh... are you sure about that, Deutsche Bank???


Jeff said...

Nice work. This scumbag Lippman and all his ilk should be publicly decapitated for what will end up being decades of pain for millions - PAIN THEY CAUSED!!!!

Daniel said...

Lippmann was doing his job, and doing it will. His synthetics were amply transparent. The real fault for the housing "bubble" pain lies with the consumers who bit off miore than they could chew.

Tyrone said...

He may have been doing his job, but he still deserves his 'Number 1 Asshole' ranking.

And you cannot just blame consumers, unless by 'consumers' you include lenders. For example, strawberry pickers earning $14,000/year shouldn't receive $700,000 loans.

From top to bottom, everyone involved in the transacations was complicit.

Daniel said...

i believe that the example you gave (700k for 14k earners) is more extraordinary than usual. since when do lenders HAVE to accept the credit they've been extended? people know what they can and can't afford. in their heart of hearts, they know.

Jeff said...

What's the deal with people like "Daniel" that put BUBBLE in quotes?

As if it wasn't really a bubble or something.

Tyrone, you are 100% correct, they were all complicit. Lets also not forget to place a huge chunk of the blame directly on Alan Greenspan and the Fed.

Tyrone said...

Just so you know, the strawberry picker story is real...

Strawberry picker gets $720,000 loan.

Jeff said...

Daniel - These insane loans were not as uncommon or as extraordinary as you think. There were numerous variations of absolutely insane and totally fraudulent lending practices that took place. This was pervasive in the industry as they were all competing for "business".

I know people that didn't even have jobs that bought 600K homes and made the mortgage payment with cash advances off credit cards or by pulling the fake equity out of the homes they were trying to flip.

This was THE BIGGEST BUBBLE IN HISTORY! Don't know why people like you can't comprehend that!

Also, Many of these (not so bright) people were "Living the American dream" because they were told it was possible!

Many of them were able to afford the BS "teaser" rates, but rest assured - the scumbags giving them these bogus loans knew damn well these people couldn't afford their homes when loan resets hit.

But why would they care? They got HUGE HUGE commissions to put these people in these bad loans. Bottom line is GREED - which is what feeds the terminal phase of all bubbles....

I can assure you there are going to be regulatory people pouring over these loan documents and looking to place some blame. The agencies are ramping up employment. Should be the next employment growth area.

A lot of these mortgage and Real Estate people (including notaries) are going to be in BIG trouble.

And you can expect Angelo "Tan-Man" Mozilo to end up in jail in the next 12 to 18 months where he deserves to ROT!

Judith said...

Why would anyone in their right mind defend Gregg Lippmann. He was clearly in it for all he could get without the slightest interest in the 'strawberry pickers' of the world. It is human nature to take the biggest piece and that faults the strawberry picker but when the lender knows the strawberry picker is a diabetic, and still gives him the biggest piece, that is selfish, unscrupulous, virtual murder.

Brian said...

People like Lippman are the reason that American managed to avoid another great depression. He tried to tell people to SHORT the housing market. Had he not, the bubble would have continued to grow bigger and bigger. Traders who take short positions are what bring overly-inflated asset prices down to their true value. He should be thanked, not called a scumbag.

Jeff D said...

"Brian" - You are a little late to show up here and defend yourself, errrr, I mean "Greg"......

I still say the guy (you?) is (are) a scumbag.

Also, your contention that we've avoided a depression is false.

It's way too early to declare victory........

Brian said...

Jeff D - I'm not sure that you understand what Greg Lippman did for a living. Do you know what a CDS is?

Do you think that the prices of housing in the United States were irrationally inflated in the years 2005 - 2007??

Let's say that house prices were out-of-line with true values. How would you expect those prices to get back in-line? Do you think it would have been better for the bubble to get bigger and bigger?

In my mind, the sooner that prices dropped, the better. Had prices dropped in 2005, when they were only slightly inflated, there probably wouldn't have been a credit crisis. The best means available for a trader to take a short position on the housing market was to buy CDS protection on near-junk bonds comprised of subprime loan obligations. If you know of a better way, please do tell!

Do you blame traders who short sold Enron stock for the company's collapse? I blame the company's executives for committing fraud and artificially inflating the stock price. That analogy applies wonderfully to the subprime meltdown as well. Think about it.

Johnny Chang said...

I totally agree with Brian. You're using Greg Lippmann as a scapegoat for the housing collapse. You also have to blame the real estate agent, the mortgage broker, the rating agencies, SEC, auditors, etc. The list goes on, you can't just blame it on one guy.
Greg did his job. If he wasn't at Deutsche Bank, it might have became another Lehman Brothers or Bear Stearns. That guy had to fight with a lot of his own DB colleagues to save the firm.

James said...

I am in agreement with Brian and Johnny. Greg made a great trade.

Tyrone said...

You guys are not reading this blog.

You also have to blame the real estate agent, the mortgage broker, the rating agencies, SEC, auditors, etc. The list goes on, you can't just blame it on one guy.

The blog includes some from all of the above.

Greg did his job.

Yes, Greg did his job and he CONTRIBUTED to the housing bubble. Is this something you should be proud of? When do you stop and question your job and your orders, above what is the moral thing to do? Go do a Wiki search on the Nuremberg Defense.

fizzyh2o said...

the lenders were lending to anyone so they could get the fees. the mortgages were being insured and sold off (more fees) this freed up capital so the could lend for more fees. somebody convinced somebody this would work and the federal government would bail them out if it went south. biggest fraud scam in history on the backs of the middle class and working poor.

Sean_Moaref_MotherFUCKER said...

The problem isn't Lippman. The problem was and still is Americans' fiscal irresponsibility.

They call us Canadians boring and our banking system boring but we now have the strongest economy of all the G8 because of that "boringness"

I'm sorry but giving a $720k mortgage to someone earning 15k...yes, you are all right..it's everyone in America's fault for letting that happen - the banks, the government, the financial "wizards", the folks who wanted that mortgage, etc

America, time to start being boring. It's the turtle that ends up winning the race. Always.

superhotasses said...

Hello Sean MotherFUCKER -

Funny you mention Canada. Are you aware you & Australia are the only two countries in the world who have housing bubbles that haven't blown?

Enjoy the popping of YOUR bubble.....

I know plenty of Canadian folks who think they are somehow impervious what is absolutely guaranteed to be nasty....

The global depression is still slow to be recognized by many, but it will be pretty obvious by 2011.

Remember, in the early 1930's - folks didn't know it was a depression they were in.....