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how the world works


Black compares Trump's relationship with Goldman with Keating's with Drexel. He probably knows as much as anybody since he successfully prosecuted that case.


Nothing the smartest guys in the room love more than a desperate high rolling subprime borrower. Best yet if you can just broker the loans and take a fat fee with no risk.


A bit of a digression but farm lenders probably are far from the smartest guys in the room but the game is similar. As long as they have some collateral it is a lot easier to deal with one guy for $5M than 20 for $250K.


Given how the refinancing season this winter looks to be shaping up I'd expect the outcomes to vary wildly. It will probably be a function of how the bank examiners classify the loans and how much exposure the institution has to that sector. I assume that once again the inclination would be to shut off the smaller ones first rather than take the biggest hits.


The hope would be that before the big ones blow up Willie will have mounted a Farm Aid for Bankers tour.


Also I'd assume that the tipping point will often be with vendor financing. The primary lenders have attained a fair cushion by letting the vendors take the first risk while they sit back with first lien. So in that regard I'd guess maybe it will proceed a bit slower than you'd assume as Monsanto, duPont et al are going to be slow to give up "market share."


I bet that K Street is going to be gearing up on their behalf in order to save those Family Farmers.

2 Replies
BA Deere
Honored Advisor

Re: how the world works

Well, Cruz was 86`d over partly Heidi`s Goldman Sachs connection.  Wall Street is 4 square for Hillary...and why is that?  Because they know Hillary can be bought.   You wait, as Trump moves up in the polls, the Dow will tank and "they" will spin it as "fear of a president Trump"..that is how a market correction in a market that obviously is 50% over priced will be spun.   What`s Obama and Janet Yellen`s fault will be shifted to candidate Trump.   "Vote for Hillary for your 401Ks!!!!"

bruce MN

Re: how the world works

Just once would you please read the linked material before responding? Esp. When putting up one of your own in response.