Reporters are often accused of being cynics and naysayers, and sometimes some of us are. But we are strictly bushleaguers when compared to the cynicism of some bond traders and investment bankers, who would happily find a way to profit from Armageddon if they could.
It would be called a “Doomsday Short” or some such thing — short being the term for taking a position that the price of something is going down. And the technical term would be “collateralized doomsday debt product.” The hedge would be a private spaceship to Mars.
If this sounds far fetched, see the New York Times story on Goldman Sachs and the housing bubble and investments in subprime mortgages. The customers got one story, the big guys knew it was crap, and made billions. The Securities Exchange Commission is on the case.
The last time we heard from the SEC it was a few days ago in connection with Morgan Keegan and a fraud allegation against mutual funds run by James Kelsoe Jr. Who says Memphis ain’t big league?
