Ratings Week III

"I admit," said an analyst from Fitch, 
"We've enabled some banks to grow rich, 
But a hard-line position 
In this competition 
Would only induce them to switch."

Ratings Week II

Said the banker: "My friend, It occurs to me
That you seem just like Standard and Poor's to me;
Though your scruples are real,
In pursuit of a deal
You would give up a wee bit of yours to me."

Ratings Week I

A CDO analyst from Moody's
Confessed: "I've neglected my duties.
We'll soon be downgrading
Some triple-A ratings
When everyone sees that we blew these."  

Intra-European Wealth Transfer

Says Herr Pöhl, ex-Bundesbank president, 
"This bailout's akin to embezzlement. 
Greek tycoons and French banks 
Owe my countrymen thanks 
For this really regrettable precedent."

Why Does the Greek Crisis Matter?

Josef Ackermann deftly explained
Why Greece has the markets so strained:
Like a wellhead that leaks,
A default by the Greeks
Could probably not be contained. 

Perfect Game

Wall Street's "too big to fail" titans
Had a quarter so good that it frightens;
On the trading parquet,  
They made money each day -
Is it rigged? Incredulity heightens...

Dear Uncle Sam...

Fannie Mae wrote the Treasury a letter
For a bailout that's eight billion better;
Although Fannie and Fred
Were both presumed dead,
It turns out she's quite a bit debtor.

Post Mortem on the Dow's 1000-Point Drop

Said CFTC Chairman Gensler
To Geithner, "Are we among friends, sir?
(I'd like to say how
They whipsawed the Dow,
But I really don't think that I can, sir.)"

Questions, Fundamental & Technical

"Dad," asked the girl with a frown,  
"Why are bond prices up, and yields down?"
"In a bull market trend,  

One will likely expend  

More pence for that guaranteed Pound."    


"Mom," asked the boy with a frown,
"What makes equities hop up and down?"
"Earnings releases,  
And stock-picking theses  
With words from wise men of renown."

Great Financial Crises I: "The Trouble Stops Here"

Among Wall Street's Croesian bosses,  

J.P. Morgan stood tall as Colossus;

He laid down the law  

With the clench of his jaw,  

And the point of his purple proboscis.  


In the 1907 collapse,
Mr. Morgan saved Wall Street perhaps;
He commanded the banks
To pay up and close ranks
With a contract he dropped in their laps.


Before they created the Fed,
Mr. Morgan did not fear to tread;
With an effort titanic
He stemmed a bank panic:
"The trouble stops here," Morgan said.

One Bad Apple, or a Rotten Bunch?

There's a time-honored CDO dictum,
When a firm's charged with fleecing a victim:
Every other firm too
Will conduct a review
Of the tranches it sold, and who picked 'em.

The Real Blow-Up

An eruption, intense and gigantic,
Roiled markets across the Atlantic;
This vesuvian debt,
One mustn't forget,
Is Hellenic more so than Icelandic.

Overheard at the Desk of "Fabulous Fab"

"This CDO's fit, if you please,
For a carry trade like IKB's,
With a mortgage portfolio
Hand-picked, as I told you,
By investors with deep expertise."

Abacus 2007-AC1

Said John Paulson, "Subprime will tank,
And I'd like to take that to the bank."
Said Goldman, "We'll fashion
A short you can cash in
From the Kool-Aid our dumb clients drank."

They'll Live Forever, Won't They?

Barney Frank has explained with assurance
How default swaps defaulted in torrents.
Says Frank: "AIG's
View of poor mortgagees
Was like vampires buying insurance."

Swap Talk

Said Obama: "For all of our betterment,
Derivatives need clearinghouse settlement,
But the five biggest banks
Are circling their tanks,
A politically potent impediment."

A Derivative Argument

Goldman and Morgan disputed
That derivatives must be concluded
Via centralized clearing:
"Our return's disappearing 
If this bank reform bill's not diluted."

Where's My Hedge?

Said the trader: "We've no business trying
To bet on the debt underlying;
When we want to unwind,  
We quite often find  
That the market is no longer buying."

He Hedged, and Regretted It

Said an old soybean farmer named João,
Admiring the fruits of his plow,
"My only concern is,
The money I earn is
All tied up in margin calls now."

Mr. Geithner's Lingering Resentment

"The stimulus had its effects, 
And avoided some financial wrecks, 
But while saving the banks, 
Did I ever hear thanks 
As they cashed in their big bonus checks?"

Special thanks to guest contributor Andy Golub!