While I realize this post has absolutely nothing to do with what I normally (for 4 posts) write about, but I figured I would switch it up.
After watching the Committee on Homeland Security and Government hearing regarding the role of investment banks in the financial crisis (cause Goldman Sachs was the only investment bank during that time?) it got me wondering why this whole SEC civil suit was such a big deal. For those who dont know the SEC filed a suit on April 16 against Goldman Sachs essentially claiming that Goldman knowingly betted against their clients. That is the easy version of what it is about. More complexly, the SEC claims that Goldman knowingly created a colateralized debt obligation (CDO) with Paulson & Co. (a hedge fund) through ACA Corp. and filled it with mortgage backed securities that were extremely risky, though highly rated. Goldman and Paulson & Co. decided to take a short position on this CDO (they bet against the success of the CDO, they essentially bet that the CDO was going to fail). Now Goldman then sold this CDO, named Abacus, to its investors. For a CDO to work, for every short position you need a long position (betting that the CDO would be successful). Goldman's investors were taking a long position, while Goldman itself was taking a short position. At the time when the Abacus CDO was made, April 07, it would have been a little odd for someone to take a short position on a housing CDO mainly because everyone thought the housing market would continue to decrease. It would have been more common for someone to take a long position on a CDO made up of these securities.
Now here comes the issue with the SEC, Goldman never told its investors that it was taking a short position on this CDO. They also think that if its investors had known that Goldman was shorting the CDO that it would have changed investor behavior, a hypothetical situation. Another issue is that supposedly investors thought Paulson was taking a long position, essentially they didnt know that Paulson was shorting the CDO. The SEC is saying that had investors known this it would have changed investor behavior, another hypothetical situation. Now had Paulson been a big name hedge fund at the time, it may have changed investor behavior. From my understanding Paulson was not that big of a hedge fund at the time and would have probably had a very small impact on investor behavior.
My other issue is, while Goldman knew the securities going into the CDO were pretty much junk, they were rated AAA by both Moddy's and S&P and it wasnt until 6 months later that the securities in the CDO were downgraded (Goldman didnt actually know that the securities were going to be downgraded or that the housing market would crash, they were just betting that it would). I think this become more of an issue with the credit rating agencies than it does with Goldman. Goldman was just smart enough to know that the securities werent the best regardless of their rating. Yeah, ethically, I do think that maybe they shouldnt have been as willing to sell highly rated "junk" securities to their investors but still investors knew the securities that were included in Abacus and they could have easily of done their homework. Regardless of their ratings, alot of investors were willing to buy these incredibly risky assets because 1. they thought the housing market was going to continue rising and 2. the riskier the asset the higher the payoff.
This also brings up the issue that during the early to mid 2000s investors relied heavily on credit rating agencies and what other people were doing. Dont invest in something unless you know what you are investing in. Coming from a lazy person, I probably wouldnt have done my homework, but looking at this case now, I know that if I ever invest in anything I will definitely do my homework, or I wont invest.
Had this issue come up in July or August of 2007 I dont think Goldman would be charged with anything. I think the only reason they are getting charged now is because the market crashed, and they read the market correctly. As a result, I think Goldman didnt necessarily do anything illegal, while it may have been morally questionable, but lets be real banking isnt the most morally sound industry (while I really wish it was). And yeah maybe we do need some more morals in the banking industry but I dont think that is the governments job I think it needs to be individual bankers who make the decision to stand by their investors rather than profits.
In the end, for now at least, I am all for Team Goldman!
Some interesting articles to read:
Abacus Deal: As bad as they come
Trader's Testimony Raises Legal Issues
Wednesday, April 28, 2010
Sunday, April 25, 2010
Unconditional Faith
We constantly hear about God's unconditional love but how often do we think about unconditional faith. I can certainly say that I don't always have unconditional faith. A faith that is never failing and always trusting, regardless of what is going on you always have faith that God is in control, regardless of what God tells you to do you do it because you have faith that God will see you through. I guess it could also be considered blind faith, knowing that as long as you listen God will always lead you in the right direction. I have a lot of respect and admiration for people who have unconditional faith, Joshua was one of those people.
This week in Church we were talking about the destruction of Jericho, Joshua 6. I must say that Joshua had pretty unconditional faith in this story. If God told me to walk around a city for 7 days, 13 times, and He would give it to me I would probably be like really God, seriously? But not once did you see Joshua question God and say, "are you sure about this, you really want me to walk around a city 13 times and then somehow it will be conquered?" Instead Joshua told it to the people how it was, he didnt tell them with a wavering voice but with a strong voice as if he had full confidence that God was going to give him Jericho, why because God said "I have given Jericho into your hand". That was enough for Joshua to know that God was in control. Especially coming from some big military victories it is suprising to me that Joshua never once asked God why he couldn't just take the city by using his army.
I feel like that now days we have been let down by nearly everyone in our life in some way or another that it is hard to have unconditional faith in the people on earth and sometimes I think it may be hard for us to have unconditional faith in God. This is something I constantly struggle with, a large part is probably because I am so impatient, is that when God doesnt give us what we think we need in a timely manner we may feel that God has let us down, when in reality it may be God's way for setting us up for something better.
There is this type of bamboo, Im not quite sure on the name, that when you plant it, it kind of goes underground for 5 years. 5 years! But once it starts growing it grows at an astonishingly fast rate, somewhere around 2 and a half feet a day! Now for me personally, I probably would've given up on it after about 6 months (and that is pushing it, I come from the land of instant gratification). My biggest downfall is most likely my impatience, if I dont see results quickly I generally give up on whatever Im doing, not the best way to live you life. But what I would have given up on (the plant) had the potential to grow into something big and beautiful. Sometimes I think we give up on faith because we dont get immediate results, but just imagine what God could do if you just waited, patiently.
The other interesting aspect of the story of Jericho, that also have to do with patience, is that God told them to walk around the city 13 times. Something Pastor Mark brought up this week was that sometimes we give up on circling whatever we are asking God for because we get impatient, and sometimes we dont even know what we should be circling in the first place, what we should really be praying for. Again, I think it is important to 1. realize what we are asking God for and 2. be willing to wait patiently for it. When God decides you dont need whatever you are asking for, remember that he will always have something better for you down the road. It may be years and years down the road but we need to have an unconditional faith and know that God is in control.
Sometimes it is all easier said then done, but that is my goal: to have an unconditional faith.
Have a great week!
This week in Church we were talking about the destruction of Jericho, Joshua 6. I must say that Joshua had pretty unconditional faith in this story. If God told me to walk around a city for 7 days, 13 times, and He would give it to me I would probably be like really God, seriously? But not once did you see Joshua question God and say, "are you sure about this, you really want me to walk around a city 13 times and then somehow it will be conquered?" Instead Joshua told it to the people how it was, he didnt tell them with a wavering voice but with a strong voice as if he had full confidence that God was going to give him Jericho, why because God said "I have given Jericho into your hand". That was enough for Joshua to know that God was in control. Especially coming from some big military victories it is suprising to me that Joshua never once asked God why he couldn't just take the city by using his army.
I feel like that now days we have been let down by nearly everyone in our life in some way or another that it is hard to have unconditional faith in the people on earth and sometimes I think it may be hard for us to have unconditional faith in God. This is something I constantly struggle with, a large part is probably because I am so impatient, is that when God doesnt give us what we think we need in a timely manner we may feel that God has let us down, when in reality it may be God's way for setting us up for something better.
There is this type of bamboo, Im not quite sure on the name, that when you plant it, it kind of goes underground for 5 years. 5 years! But once it starts growing it grows at an astonishingly fast rate, somewhere around 2 and a half feet a day! Now for me personally, I probably would've given up on it after about 6 months (and that is pushing it, I come from the land of instant gratification). My biggest downfall is most likely my impatience, if I dont see results quickly I generally give up on whatever Im doing, not the best way to live you life. But what I would have given up on (the plant) had the potential to grow into something big and beautiful. Sometimes I think we give up on faith because we dont get immediate results, but just imagine what God could do if you just waited, patiently.
The other interesting aspect of the story of Jericho, that also have to do with patience, is that God told them to walk around the city 13 times. Something Pastor Mark brought up this week was that sometimes we give up on circling whatever we are asking God for because we get impatient, and sometimes we dont even know what we should be circling in the first place, what we should really be praying for. Again, I think it is important to 1. realize what we are asking God for and 2. be willing to wait patiently for it. When God decides you dont need whatever you are asking for, remember that he will always have something better for you down the road. It may be years and years down the road but we need to have an unconditional faith and know that God is in control.
Sometimes it is all easier said then done, but that is my goal: to have an unconditional faith.
Have a great week!
Monday, April 19, 2010
A Journey Through the Wilderness
So as part of the NCC challenge we have finished the book of Numbers and are onto the book of Joshua. When I first decided to start the garden to city challenge I was a little hesitant that Numbers was the first book I would be reading. As a person who grew up in the church the Torah was known as Genisis and the four other boring books in the beginning of the bible, oh and you have to throw in the Prince of Egypt (i.e. Exodus). In my 22 years of life, most of which have been spent being in and around church it is surprising to me that I have never actually read the book of Numbers, and as of now it is one of my fav books of the Bible. While there is a lot of number counting and rules on how and when to sacrifice (some of which can be tedious to read), there are also some very interesting stories.
First let me start by saying the beginning of Numbers Moses is commanded to take a census of the children of Isreal. While reading through this I was amazed at how many people there actually were, some six hundred thousand people. That is a lot of people, when I had read through I called my mom and was like "did you know there were over 600,000 people who came out of Egypt and wandered the desert for 40 years, cause they definitely did not show that on the Price of Egypt". I call my mom quite often with things like this, in which case I'm sure 90% of the time she rolls her eyes. The last time I called her about something I discovered it was "Mom did you know there are dragons in the bible?" To which she responded "No there is not, it is probably your translation" to which I told her a couple days later "no there are dragons in the bible." Back onto the subject. As a child I always envisioned Moses leading a group of maybe 10,000 or 20,000 not 600,000 people. Not only did he lead that many people out of the desert but he had to listen to that many people constantly complain. One of such complaints was that they werent happy with the food they were miraculously receiving daily from Heaven. As I read I was thinking to myself, "wow seriously Israel this bread is raining from the sky and you are complaining?" But it made me wonder how often has God provided for me and I constantly complain of how I want something new or different. I do this constantly. I am the type of person who gets bored with things real quick and constantly wants something different. It is a complete shock and surprise that I have had the same phone for almost 2 years now, since I used to get a new phone almost every six months. So reading through Numbers I have realized that God has blessed me with so much, has constantly provided for me and that I should be grateful that I even have a place to sleep and food to eat. I think a lot of the time we take simple things like that for granted, and I think it is because we have spent our whole lives with such amenities.
Not only does Isreal complain quite often but the thing I found pretty amazing in most of Numbers is that when God pretty much says he is going to wipe them out and start new, Moses pleads with him to pardon the children of Israel. While God loved the Children of Israel and like most parents got a little sick of their complaining sometimes, Moses was there to step in on their behalf. Another thing I definitely noticed while reading was all of the sacrifices that needed to be made and the complexity of them. As I was reading I couldn't help but think "wow I am so happy Jesus came and made the ultimate sacrifice" my other thought was, "wow they have a lot of animals roaming around with them". But my main thought was how thankful I was that Jesus came and made the ultimate sacrifice for all of us.
Onto the stories. While there were many stories, my favorite was probably the story of Balaam's talking donkey as told by Mark Batterson. While many of the stories are good I think that it is the ultimate message that is conveyed in Numbers that is probably the best. As Pastor Mark said yesterday in Church the book of Numbers shows that it isnt about where you are going but who you are becoming. It is very interesting when sometimes you are going somewhere, you have a goal or a plan, and God blocks it. It is even more frustrating when you think you goal or plan has been blessed by God, yet he still blocks it. Everyone once in a while I like looking back and seeing what God has done in my life, I like to think things happen because of what I do when in reality God has a huge hand in things I have and the decisions I make. As I have gone through high school and college I look back on the way things have worked out and it is sometimes amazing to see why God has done the things he has done. For instance, why I ended up choosing to go to school in San Diego (I ended up rededicating my life Easter of my sophomore year), why I ended up in DC (I got baptized in November), these are big examples and my life is full of more of stories of what God has done in my life.
But the main purpose of this post was the Israelite's journey through the wilderness, and I think all of us have had some journey through our own wilderness and God has brought us into the Promise Land. For me, like my "spiritual bubbles," I have traveled through many wildernesses most of the time because of my own decisions, yet every time God has brought me through and has always been there with open arms and an everlasting love. What an amazing thought, that through anything and everything God will always be there waiting with open arms.
Well thats all I have for today, more to come!
-S
First let me start by saying the beginning of Numbers Moses is commanded to take a census of the children of Isreal. While reading through this I was amazed at how many people there actually were, some six hundred thousand people. That is a lot of people, when I had read through I called my mom and was like "did you know there were over 600,000 people who came out of Egypt and wandered the desert for 40 years, cause they definitely did not show that on the Price of Egypt". I call my mom quite often with things like this, in which case I'm sure 90% of the time she rolls her eyes. The last time I called her about something I discovered it was "Mom did you know there are dragons in the bible?" To which she responded "No there is not, it is probably your translation" to which I told her a couple days later "no there are dragons in the bible." Back onto the subject. As a child I always envisioned Moses leading a group of maybe 10,000 or 20,000 not 600,000 people. Not only did he lead that many people out of the desert but he had to listen to that many people constantly complain. One of such complaints was that they werent happy with the food they were miraculously receiving daily from Heaven. As I read I was thinking to myself, "wow seriously Israel this bread is raining from the sky and you are complaining?" But it made me wonder how often has God provided for me and I constantly complain of how I want something new or different. I do this constantly. I am the type of person who gets bored with things real quick and constantly wants something different. It is a complete shock and surprise that I have had the same phone for almost 2 years now, since I used to get a new phone almost every six months. So reading through Numbers I have realized that God has blessed me with so much, has constantly provided for me and that I should be grateful that I even have a place to sleep and food to eat. I think a lot of the time we take simple things like that for granted, and I think it is because we have spent our whole lives with such amenities.
Not only does Isreal complain quite often but the thing I found pretty amazing in most of Numbers is that when God pretty much says he is going to wipe them out and start new, Moses pleads with him to pardon the children of Israel. While God loved the Children of Israel and like most parents got a little sick of their complaining sometimes, Moses was there to step in on their behalf. Another thing I definitely noticed while reading was all of the sacrifices that needed to be made and the complexity of them. As I was reading I couldn't help but think "wow I am so happy Jesus came and made the ultimate sacrifice" my other thought was, "wow they have a lot of animals roaming around with them". But my main thought was how thankful I was that Jesus came and made the ultimate sacrifice for all of us.
Onto the stories. While there were many stories, my favorite was probably the story of Balaam's talking donkey as told by Mark Batterson. While many of the stories are good I think that it is the ultimate message that is conveyed in Numbers that is probably the best. As Pastor Mark said yesterday in Church the book of Numbers shows that it isnt about where you are going but who you are becoming. It is very interesting when sometimes you are going somewhere, you have a goal or a plan, and God blocks it. It is even more frustrating when you think you goal or plan has been blessed by God, yet he still blocks it. Everyone once in a while I like looking back and seeing what God has done in my life, I like to think things happen because of what I do when in reality God has a huge hand in things I have and the decisions I make. As I have gone through high school and college I look back on the way things have worked out and it is sometimes amazing to see why God has done the things he has done. For instance, why I ended up choosing to go to school in San Diego (I ended up rededicating my life Easter of my sophomore year), why I ended up in DC (I got baptized in November), these are big examples and my life is full of more of stories of what God has done in my life.
But the main purpose of this post was the Israelite's journey through the wilderness, and I think all of us have had some journey through our own wilderness and God has brought us into the Promise Land. For me, like my "spiritual bubbles," I have traveled through many wildernesses most of the time because of my own decisions, yet every time God has brought me through and has always been there with open arms and an everlasting love. What an amazing thought, that through anything and everything God will always be there waiting with open arms.
Well thats all I have for today, more to come!
-S
Sunday, April 18, 2010
The Beginning
On Easter I decided to take the NCC challenge and read through the bible in a "year". Easter 2010 to Easter 2011 I will have read through the entire bible, that is the plan at least. While reading through the bible different people from NCC will blog daily about the passages for the day. While reading through the bible during my first week and reading through the blog posts I thought to myself "I should really start a blog about what I get from the reading," because I felt like God was revealing things to me that needed to be written down, thus this blog was born. So I was ready to start a blog but I didn’t have a name for it, and I’m not the most creative person around. I asked a co-worker and he suggested "larrykudlow'spenpa," that wasn't going to happen (I happened to have sent Larry Kudlow an email that day). So the search was still on for the name of this blog.
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