Wednesday, December 23, 2009

Janet Tavakoli Responds to Thomas Adams on Goldman and AIG

Earlier today, Naked Capitalism posted a guest column by Thomas Adams of Paykin Krieg & Adams LLP. In his column, Adams argued that Tavakoli should have made stronger accusations against Goldman, the Fed, the Treasury and AIG.  This is kind of  like arguing that Paul Revere should have gotten on his horse earlier to warn that the British were coming.

Tavakoli has been in front of the pack in many charges against Goldman et al. In the face of that Adams' comments about Tavakoli are, well, interesting. 

That said, Tavakoli is picking up a strong international following. Paul Jorion in France contacted her to get a response on the Adams post. Here is an English translation of what appears at Blog de Paul Jorion:

o Paul,

Apparently these people (I don’t know them) don’t like me, and so what? Regarding my position on AIG, the following information may make it clear that I have spoken up early, specifically, and in more than one venue.

I am sure I was the first to speak up in the mainstream media in August 2007 when no one else was even aware there was a problem with AIG. I also met with Jamie Dimon in August of 2007 for the purpose of discussing my concerns about AIG, and I spoke with Warren Buffett about it via telephone. I put my reputation on the line in a very big way.

This is not the first public article I have written about AIG, CDOs, or credit derivatives (my 1999 book covers information asymmetry in a lot of detail). I have an extensive body of work, and I have put many (but not all) public articles and videos on my web site going back to 2003 when I started my firm and began making information publicly available. and I think readers can make their own decisions about the merits.

The facts may suggest a conclusion, but that doesn’t mean one should jump to one without having more to back it up. I am happy to make the case for reparations. Previously, I publicly stated there should be a fraud audit of the securitization activities of several Wall Street firms, including Goldman Sachs. This does not mean you are accusing someone of fraud, only that the audit will be extensive enough to uncover it, if it exists.

It is also likely that Goldman realized the game was up on everyone’s CDOs (not just their own). The circumstances surrounding the formation of the ABX index warrant more investigation as suggested investigative reporting by the late Mark Pittman of Bloomberg News. Regarding Goldman’s hedges, One would want to know details about Goldman’s hedges. I asked its spokesman for specific details about a variety of AIG hedges in various markets, and although he said he would respond to my questions, he did not.



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