ProPublica Shows Merrill Paid Traders to Take Its CDOs

[Donnachaidh]

http://www.cjr.org/the_audit/propublica_shows_merrill_paid.php

I really hate when news organizations drop big stories over the holidays. For one, they have far less chance of making an impact when people are traveling and/or headfirst in the eggnog (for another: CJR shuts down for a glorious week and a half then).

Last year, it was The New York Times dropping a big Goldman story on Christmas Eve.

This go-round it’s ProPublica dropping a standout piece on the 22nd. Word for the press: Get this stuff out a week before Christmas or hold these pieces for the new year.

Jake Bernstein and Jesse Eisinger are the duo who dropped the Magnetar blockbuster in April. Ever since, they’ve been pounding the story of how Wall Street intentionally kept the bubble game going long after the market originally started to decline by creating false demand.

Remember, Magnetar almost singlehandedly kept the toxic CDO game going in 2006 by buying up the most-toxic equity slices so the securities would still get created and it could bet against them.

More at the link --

[dkf]

1. Link to the Propublica story. What a bombshell.

http://www.propublica.org/article/the-subsidy-how-merrill-lynch-traders-helped-blow-up-their-own-firm

I was arguing with someone that bonusing encourages bad behavior on Wall Street and should be replaced by salaries. This convinces me further.