THE FUTURE OF FINANCE BLOG

Is There Anyone’s Money Harvard Would Not Take?

June 16, 2015

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It’s fitting that Hedge Fund speculator John Paulson gave his $400 million donation to Harvard’s School of Engineering and Applied Sciences (SEAS). The largest in the history of the school, it was described as an act of “stunning generosity” by President Faust. That’s her name. You can’t make this up.

Paulson of course is known for his role in engineering with Goldman Sachs the infamous Abacus trade, a financial atom bomb designed to deceive while inflicting maximum damage on the market and society. And for what end? Personal enrichment. It would later require Goldman Sachs CEO Blankfein to attempt a lame — embarrassing really — defense of his firm’s “client comes first” reputation in front of Congress. Goldman would soon settle accusations of financial fraud with the Securities and Exchange Commission for $550 million. All the attention on “love to hate” Goldman deflected it away from Paulson, the principal behind the trade.

In fairness, Paulson wanted to make a speculative bet that the systematically fraudulent subprime market built on “liars’ loans” would soon collapse. That judgment was correct. But simply shorting mortgage bonds was expensive, and the timing of the collapse was unknown so the costs could mount. Not a “great trade.”

This is where the twisted genius of Paulsen and his co-conspirators came into play. The (too) clever feat of “applied financial engineering” was unprecedented, even in a world of financial engineering run amok. It was also an act of sheer frontal violence on a few, such as German Bank IDK. A rescue ensued, sending ripples beyond Germany.

Whether bond insurer ACA Financial Guarantee Corporation was a victim or a co-conspirator all to eager to gorge at the fee trough next to Goldman remains a question in my mind. The lives of millions of unsuspecting innocent citizens were harmed or wrecked — some by suicide — by the financial crisis, which was no doubt made more extreme by the fallout from this synthetic atom bomb inserted into the system. Indeed, the Abacus trade and a series of Magnetar trades executed by JPMorgan and others, created leveraged and amplified losses on the stock of bad loans, willfully, with great attention to detail.

It is difficult to fathom the workings of a mind capable of first masterminding and then actually pulling the trigger on a deal like Abacus. Merely profiting on others’ misery pales in comparison. These are harsh words. But the complexity of modern finance has shielded the public from seeing the full truth. And the financiers who do understand (including the ones on Harvard’s Board it would appear) prefer the legend that Paulson was simply a prescient, even brilliant trader in a game played by big boys where winning is what counts and whining is not welcome.

I’m now going to speculate, but here’s how I think it went down:

The Set Up

The sub-prime mortgage market was known to be a cesspool of fraud, with many homeowner’s in houses they could not afford, thanks to low-life mortgage hucksters, poor regulatory oversight, and well-intended but imprudent public policy support for housing via the mortgage agencies. As a reported $15 million donor to the Center for Responsible Lending (some suggest CRL was a contributor to the problem by pushing lax mortgage underwriting standards), Paulson knew this better than most. While hard to imagine, some even consider that $15 million a strategic donation to dramatically expand CLR’s well intended but ill-conceived efforts, a premeditated, sinister dimension of the trade set up. That’s dark.

Paulson understood that many borrowers were exposed to and unable to cope with even the slightest rise in interest rates if and when they should come. And they came in response to the price of oil going from $20 in 2002 to $80 in 2006 (on its way to $140). And the subprime market is linked to the $10 trillion mortgage market (keep this in mind for later). The investment banks had hoodwinked the (not-so-clever) rating agencies into using their own models to assign credit ratings to structured mortgage bonds, handing much control in the hen house over to the foxes. For money of course.

The resulting boom in “structured finance” complex mortgage origination was mind-boggling, some of it with no economic purpose. Wall Street balance sheets were also recklessly bloated with risk, warehousing a lot of the “less risky” securities to pad their profits (and bonuses) with net interest income without disclosing the true risk to their blissfully ignorant management.

Paulson knew these “weak hands” would be forced to sell in a panic if and when the market turned, accelerating the fall.

The Trade Concept

The boys at Paulson sensed an opportunity to “short” this ticking time bomb. But how to deal with the excessive cost of carry, particularly for the riskier junior tranches of sub-prime mortgages that would vaporize when the chickens came home to roost? This is where the twisted genius comes in.

Paulson knew that Goldman would do pretty much whatever a profitable client like him wanted. He also knew that if he brought them this trade idea, they would likely front-run him on it, because that’s what they do. But he figured there was room for both of them, and Goldman’s need to get out of their own exposure to mortgages might just accelerate the anticipated avalanche itself, a beautiful self-fulfilling prophecy.

The security selection for Paulson’s trade was based on his information advantage on pools of mortgage loans (legally/ethically attained or not I don’t know). The package was designed to create seemingly “low risk” senior securities that would in fact behave like very risky junior securities in default because of the deadly waterfall construction directing the priority of cash flows (this is the feature making it a financial atom bomb).

Normally a bond rated say AA is not expected to drop in price more than 5% due to a credit problem. Worst case might be 20%. These bonds were purposely designed to go to zero (which they did), but because Goldman and Paulson colluded to fool the rating agencies, they still had the AA label. And the AA label made them very cheap to short (via purchasing insurance on them in the credit default swap market – another victim, probably AIG). Ingenious. Never mind that if and when these AA-rated securities went to zero (unheard of), it would trigger a panic first in the entire subprime market, which would then bleed into the $10 trillion mortgage market.

Lost confidence coupled with massive scale and absurd complexity is a deadly mix, as Paulson knew devilishly well. This was the nuclear fallout feature of Paulson’s trade. Not only would his direct bet pay off, but the structural leverage in the sinister engineering of the deal itself would perhaps trigger or at least accelerate and accentuate a market panic, doubling or more Paulson’s profits. It would also lead, at least in part, directly to the collapse of Bear Stearns, Lehman Brothers, AIG, Merrill Lynch, RBS, Iceland, and Greece, and the worst financial crisis since the Great Depression, with all of the real world consequences still playing out to this day.

Any concern Paulson may have had for the millions foreclosed out of their houses, some while serving in Iraq defending his freedom, and the many lives ruined in the process (the nuclear fallout) faded into the sweetness of a billion dollar pay-day for himself. That takes a level of callousness that caused even my hardened high-yield trader friend to grimace at the time, “I don’t know how that guy can live with himself.”

Well live with himself (and his art collection, he likes Calder) he is doing. And his plan to restore his reputation has worked well. Wait eight years until the memories fade a bit. Propose the largest gift (by the smallest increment that is respectable) in the history of Harvard, ensuring a hero’s embrace from the one institution with the best reputation cred on offer (no one ever said he was not shrewd with his money). For Harvard President Faust, it was quite a bargain!

“Nature magically suits a man to his fortunes, by making them the fruit of his character.” –Ralph Waldo Emerson


CORRECTION: In response to my blog post above, I received a thoughtful and edifying note from David Beck at Self-Help Credit Union. David referred to the negative reference to their policy affiliate, Center for Responsible Lending, in my post. Here is the relevant paragraph in its entirety:

The sub-prime mortgage market was known to be a cesspool of fraud, with many homeowner’s in houses they could not afford, thanks to low-life mortgage hucksters, poor regulatory oversight, and well-intended but imprudent public policy support for housing via the mortgage agencies. As a reported $15 million donor to the Center for Responsible Lending (some suggest CRL was a contributor to the problem by pushing lax mortgage underwriting standards), Paulson knew this better than most. While hard to imagine, some even consider that $15 million a strategic donation to dramatically expand CLR’s well intended but ill-conceived efforts, a premeditated, sinister dimension of the trade set up. That’s dark.

David set me straight on the facts with respect to Paulson’s $15M donation to CRL. It occurred after the crash, so could not have been the “premeditated, sinister dimension of the trade set up” as suggested by the Center for Consumer Freedom (CCF), whose article I cited. In fact, David explained that “CCF is a front-group set up by PR strategist Rick Berman to represent payday lenders and other corporate interests opposing public advocacy groups. See here.

After reading David’s note, I actually remembered reading back at the time that Paulson had indeed made a donation to a housing advocacy group after he made his killing. I now recall thinking at the time, “he blows up all these unsuspecting people whose lives will never be the same, puts $1B in his pocket, and drops a $15M tax deductible donation on the table to assuage his guilt?”

Sure wish he had given the $400M to support those hurt by the housing bust and for policy advocacy to ensure it doesn’t happen again, rather than giving it to Harvard! Thanks David for clarifying the facts and refreshing my memory!

–John

Comment<Back
  • Rufo

    Well done for drawing attention to this. Harvard are behaving terribly and deserve to be named and shamed. Their attitude towards fossil fuel divestment is also pitiable.

    There is too much financial jargon in this article though. There are sentences that are all but impossible for a layman to follow and this to me is part of the problem. Finance people make things sound overly complicated and as a result people feel disposssed and powerless.

    • John Fullerton

      my sincere apologies and empathy. this piece was by necessity a bit technical given the highly technical nature of structured mortgage finance. I hoped the willful placement of an atom bomb analogy would be helpful to explain in everyday language what happened. Finance language is and will continue to be a challenge.
      best regards,
      john

  • Beautifully put John.

    The finance industry has become the biggest casino in town, yet they are not playing with their own property, but with the property values of all of us.

    I don’t know your legal system, in this country we have a law that allows for the confiscation of all property made as the result of illegal action.

    Surely you must have a statute making it illegal to knowingly destroy the property of another?

    I’m not a lawyer, and it would seem to contain the seed of a class action suit that some set of bright young lawyers might like to get their teeth into. Just a thought 😉

    • nickgogerty

      This is a simplistic argument for vilifying short sellers as “destroyers of property”.

      • Hi Nick

        My argument is not simply with short sellers, it is with the whole logical construct that is a market based system of valuation.

        The whole system has too many systemic feed-forwards (as distinct from stabilising feed backs) that are systemicly destabilising.

        It is all a system based on beliefs, on the individual value judgements of people in a sense, and in another sense it is being manipulated by automated systems designed specifically to extract value from trends in changes in those values as expressed through market interactions, at time frames that are below the level of human cognition.

        So yes I have issues with people who intentionally develop strategies to extract wealth and deliver nothing – it is the definition of “cheating the system”.

        And to be clear, I have no issue with people gambling. If people want to gamble with their own money, then by all means do it, go to a casino, or a race track, and gamble to your heart’s content. What I have an issue with is people gambling with a system that delivers life or death for other people (not themselves).

        Those systems that deliver the primary needs of people for food, water, shelter, education, communication, transport, healthcare, etc, need to be universally available, and outside of the realm of gambling (systemic manipulation for personal gain).

        What individuals do beyond that, is a matter of choice.

        It seems clear to me that the monetary and finance systems as currently structured deliver at least as much systemic threat as they deliver in goods and services.

        The whole system is systemically corrupt.
        It does not deliver universal security (it is so systemically structured that it cannot).

        • nickgogerty

          inherently all economic value is derived from relative perceptions and belief. The system is definitely feed forward and acts as a risk discounting system by design. the major flaws are around mis priced externalities (pollution etc.) and super-ordinate failures in risk management for commodity services like banking where short term competitive pressures and incentives lead to long term instability. Just FYI the US banking system has a crisis once every 14.7 years since 1830. Canada has had 3. If you are really into it, the book fragile by design is an awesome read on comparitive banking systems. http://www.amazon.com/Fragile-Design-Political-Origins-Banking/dp/1491540575

          The automated systems aren’t really an issue as they mostly impact price, but not value. Bad models Cupola’s, bad incentive structures etc. are much worse. check out my book to understand the difference between price and value.

          High frequency trading is annoying but only impacts price, usually not value. A bad risk model such as VaR or guassian copulas do far more damage than HFT. Just an FYI, I delivered an analysis of the Flash crash to one of our multi-trillion banks. I am against HFT due to its limited benefits and false sense of liquidity.

          Your statement, “the whole system is systemically corrupt” is a fairly empty statement. Rarely is a thing, person or institution an absolute good or bad. you may enjoy reading http://www.thenatureofvalue.com

          • Hi Nick

            I accept your first statement “inherently all economic value is derived from relative perceptions and belief.”

            Your second statement “The system is definitely feed forward and acts as a risk discounting system by design” is partially true, and the partiality depends very much on exactly what it is that you refer to with “The system”.

            It seems clear that the economic and monetary system as a whole is a very complex system, with many levels, many feedback (stabilising) subsystems and many feed forward (destabilising) subsystems. It also seems clear that many of the subsystems have been installed with multiple motives – often with a public story that supposedly holds some public benefit, and also with a private set of motives that are hidden from public view and carry private gain for some select few. This has been part of the evolving system for centuries (millennia).

            A lot of “smoke and mirrors” to use a common term.

            You go on to state “the major flaws are around mis priced externalities (pollution etc.) and super-ordinate failures in risk management for commodity services like banking where short term competitive pressures and incentives lead to long term instability.”

            The second part of that statement I can agree with.

            The first part is where we seem to be operating from different paradigms (completely different levels of abstraction).

            To me, it is clear that the idea of pricing an “externality” is fundamentally flawed in the sense that markets always value universal abundance of anything at zero.

            Given that universal abundance (of anything) has zero value, there can be zero internal incentive within the system to deliver it.

            Human beings require universal abundance of a small set of goods and services (clean water, nutritious food, safe housing, health care, communication, education and transport). We easily have the technology to supply all of those things in abundance to every person on the planet – but we don’t. The only reason we don’t is market values – not only is there is no profit in it, doing so would take all of the monetary value out of all of those goods and services. It simply makes no sense from within a market based paradigm, but from within a system where human life and human liberty are one’s highest values, it makes perfect sense.

            The issue is, that for most of human history, most things were genuinely scarce. Where scarcity is in fact genuine, markets are in fact effective and efficient tools for the allocation of those resources.

            However, we are now in an age where automation and robotics allows us to deliver universal abundance of a growing set of goods and services. However, any such universal abundance drives the market price (and thence monetary value) to zero (by definition, whatever temporal smoothing function is employed). The systemic response to this has been to erect barriers to the delivery of such abundance. Examples of such barriers are the concept of intellectual property – a complete nonsense if ever there was one. IP may have some validity over the short term (not more than one generation of the technology involved) but beyond that is a rent extraction and capital protection tool. There are many other more abstract examples.

            The fact that markets value universal abundance at zero, that we can now deliver universal abundance of a growing set of goods and service, means that market incentives are now directly threatening life and liberty for a substantial and growing subset of humanity.

            Based upon the above, it is clear that the systemic utility of markets as a prime valuation tool has passed its use by date.

            There can be a place for markets in the world going forward, and it cannot be a prime place. Their use and values must be secondary to sapient life and the liberty of all sapient entities (human and non-human, biological and non-biological).

            I am aware of the general cycles of various banking systems, and the human misery such things cause.

            If one is using “mark to market”, price and value are synonymous in economic terms. If one uses some longer term averaging function, then current market price and longer term value can vary, and ultimate all monetary value is some function of a market price – by definition.

            There is a very limited sense in which “High frequency trading is annoying but only impacts price, usually not value” can be said to be true, and it is a most trivial sense – of that most people ignore annoying things that are constant, until they do something that cannot be ignored – like collapse a system. Same can be said for people who design financial instruments that are designed to mislead (which is arguably the vast majority). In any non-trivial sense, high frequency trading is extracting value from the system, and providing nothing in return. In a biological system it would be characterised as a cancer – a subsystem out of control, using system resources for its own replication at the expense of the system a whole.

            I stand by my statement that the system is systemically corrupt in several senses.
            In one sense, the sense that it is set up to value scarcity over human life, even in times when we have the technical ability to supply all the essentials of human life to everyone, it is a corruption of value. We have so many artificial scarcities to try to retain monetary value, and hold the system together, when we need to face the reality that the system is no longer appropriate to the technical reality in which we find ourselves.
            In another sense, in the sense that it allows and does not penalise to the point of eradication, the production of junk financial instruments designed to give short term reward via deception, then it is corrupt.
            In another sense, in the sense that it supports activities like high frequency trading that have as their only purpose the extraction of profit, without any positive contribution to the system as a whole, the system is corrupt.

            We need to be thinking post scarcity, not propping up scarcity based systems by artificial means. To not be doing so is clearly to be valuing dollars over human life. That, to me, and I suspect to most human beings, is a working definition of a corruption of values.

            And I get that these statements are unlikely to make any sense to anyone who has not seriously questioned the underlying systemic structure of our current systems.

    • John Fullerton

      Ted and Nick,
      sorry for slow response… you’ve both had a good discussion here. some additional points:
      – “gambling” does not describe what has happened here. nor was paulson and the others merely “short sellers”. I have no problem with speculation, including from the short side, PROVIDED, it is done at a scale that does not slide into becoming destabilizing to the system. long debate on that one.
      – but this was willful sabotage of a market, and through it, of people’s property livelihoods, as well as entire economic collapse far worse than it needed to be if these guys didn’t manufacture leveraged derivative positions, amplifying the crash. That is not mere speculation. I have no idea if there are any laws that protect against it. so far, it would appear not. We live at a time when legislators could never have imagined the sordid behavior of speculators unbounded by any sense of ethical limits, or frankly, even a sense of humanity. Sounds trite, but as I said to a colleague who attacked me for suggesting we set boundaries above “it’s legal”, I am highly confident that neither Dennis Weatherstone when he was CEO of JPMorgan, nor John Whitehead when he was CEO of Goldman would have condoned such behavior. NO CHANCE. I knew them both, and they had a moral compass that guided decision making from the top on down… and i’m not talking about ancient history now… I’m talking about the 1980s and 1990s…

      • Hi John

        Actually, I do have a problem with gambling, when it is done with the systems that support us all. No problem with gambling in places designated for it.

        My dad used to run a Crown and Anchor board as a fundraiser for local charities. I got to examine the probabilities of the system very closely.

        At first glance a crown and anchor board appears to have odds of 50/50. However, once you examine the available strategies, the odds are in favour of the person with the most money (or in favour of the house if there is a house limit). Dad understood the probabilities. I saw him one night have a couple of city gamblers come to a fundraiser for our local hall rebuild fund, with the intention of taking that money back to Auckland. Dad ended up doubling the amount in the fund that night (took $30K off them – and 45 years ago that was a lot of money – 2 new houses worth).

        So when it comes to trading, asymmetries, in either the time one can afford to hold, or in the amount one has to play with, make a big difference to the odds.

        Money functions as the prime store of value for ordinary people – for such things as pension funds.
        The heart of the finance and trading systems are essentially gambling now. I’ve seen figures reporting that less than 10% of stock market transactions actually relate to money being used for real productive purposes (I think the last figure I saw was 6% and decreasing). I haven’t done the work to analyse it myself, and I suspect those figures are accurate.
        I have a friend in Auckland who has a bricks and mortar business, that has survived, just. He also had about $3M to “invest” in property. He leveraged that with the bank, and has turned it into nearly $200M over 20 years. Pure gambling. Zero real productivity.

        “Bricks and mortar” (goods and services) productivity is a losing game – as most of the profit ends up in finance charges – or devalued away. It’s largely because of fundamental asymmetries that most of the little guys just don’t understand – they are still working off the cultural myths that the education system has fed them. They end up trusting people who they ought to be able to trust, but can’t – bank managers and people who finance houses.
        Most ordinary people don’t get that those people would actually set them up with a contract that will see them thrown out of their house, and the house destroyed, just to make some profit on a bet.

        Such behaviour makes no sense to people who actually relate to real goods and service value – it makes sense only to people who relate only to abstract monetary value (completely abstracted from the realm of the real).

        Why do I hear Morpheus in my head “Welcome to the Desert of the Real”!

        • John Fullerton

          Longer discussion warranted, and I take your point and don’t really disagree. But given the boom bust nature of markets (made far worse by excessive speculation), my point was to suggest that there can be a productive role for speculators to help markets find “fair value”, as well as remain more liquid which is not the goal, but up to some level is helpful (we are way past that level so diminishing returns here). Take china this week, clearly got to silly bubble levels, through speculators operating on a scale that is unhealthy. But some speculators shorted that market, and some will be needed to step in to help it find its “fair value”. So all i’m saying is that if we have a market system, then there is a productive role for speculators, and market makers, SO LONG AS THE SCALE IS APPROPRIATE. Otherwise we end up with the tale wagging the dog, positive (destabilizing) feedback loops. Of course what we have today is far from appropriate scale. But equally important, and the main point of my piece, is that what Paulson was doing is not merely speculation! How society treats various professions and trades that contribute more or less to the common good is a question beyond the scope of this response or this blog, and probably above my pay grade!

          Thanks for your always insightful and challenging contributions. The piece above this one raises the question of an over arching theory of value that we need to guide our market based system. Important!

          • Thanks John

            So many issues in your last post.

            I do get the lengths to which deception was likely done, and the almost impossibility of proving intent at every step of the process (the steps of plausible deniability in a sense).

            I get that you are basically ethical, and have worked with people who were mostly ethical most of the time.

            My issue isn’t really with the ethics of the individuals generally, or of specific actions taken by specific people.

            My issue is with the system as a whole.
            My issue is with the ethics of supporting a system which is demonstrably incentivised to put vast numbers of people in poverty. It is just how the system works. For a system that has scarcity as one of the determinants of value, there must be scarcity.

            We now have the technology to go to an age of abundance.
            We can now actually make real deterministic plans to transition from a scarcity based world to an abundance based world.
            And it will be outside how most people have been habituated to think.

            I don’t like the term “pay grade”.
            I don’t like leaving important decisions to people who rise to the top in a system as systemically corrupt as the current one.

            I know a lot of people I really respect in government and industry, and they are not typically thinking outside of the “box” of current economic thought.

            I am not familiar with the details of the systems you have described, and I am familiar with the design and construction of complex systems generally (I have been running a software business for 28+ years, amongst other things), so have a feel for the general structure of the system you described initially.

            It is actually more than a theory of value to guide a market based system.

            I am making three quite distinct sets of claims.

            I am saying that what human beings actually need (as in require to survive and self actualise) is a relative small set of goods and services to be present in abundance. That set includes – fresh water, clean air, fresh living nutritious raw vegetable based food, safe and spacious housing, sanitation, access to information and education, tools for communication and transportation (and the freedom to move most places). Beyond that, everything is optional.

            I also make the explicit claim, that because markets only exist for things that are scarce (no market for air), then there is zero market incentive to ever deliver universal abundance of any good or service, and there are actually quite strong meta incentives to destroy any emergent universal abundance and turn it into a marketable scarcity.

            Thus I am quite explicitly saying that we cannot rely on markets to deliver on universal values of human life and human liberty. We can in fact expect that poverty is a necessary part of any market based system. It is a mathematical and logical necessity.

            Markets do not measure any sort of absolute value. What they deliver is relative values – relative to other goods and services on the market.

            I am also making the specific claim that we now have the technical ability to design and build automated systems that can deliver all of the essential goods and services above, with minimal if any human input (most of the time – reality is an open system, and there will always be occasional new emergent properties from such a system that will not have been considered ahead of time, that will require human involvement to correct, and such things are likely to be very low frequency, decreasing over time).

            I am quite explicitly saying that if we make a claim to value life and liberty as our highest values (which I do for myself), then we must be prepared to make all economic systems secondary to those values. That is, we must be prepared to do whatever it takes to ensure universal delivery of the essentials of life and liberty to every individual. And no market will do that in and of its own internal set of incentives. To me, that is a clear and logical demand for us to transcend markets, and market values.

            And it seems there are an infinite set of possible paths to such universal abundance, and a far larger infinity of impossible paths (paths that do not deliver consistently over time).

      • nickgogerty

        John,

        both of the CEO’s you mention sound very admirable. I wish there were more like them. I do think that firms should be more long term aligned and “own” a book and take a position.

  • Unni Krishnan

    Thanks for standing up and saying what needs to said, John!

  • Ed Whitfield

    I really appreciate this great article John. These are among the “bankers” I once told you should be jailed.

    • John Fullerton

      We certainly agree on that Ed!

  • Fran Korten

    Great article John. I have never seen so clearly laid out the fall-out from the Abacus deal. Stunning. Thank you.

    Now as to Harvard. Well, the truth is that a lot of philanthropic money comes from ill-gotten gains. Who among us has not benefited from Rockefeller money? John D. Rockefeller II was charged with rehabilitating the name – and he did so magnificently. So isn’t the real question whether there are ties in the use of that money? Whether the money is for something the university wants to do anyway? Whether it distorts the public purpose? The Koch brothers seem to want to directly influence how their money is used, including on the hiring of university faculty funded with their money. They sit on the boards of organizations they fund. This is definitely problematic. I’m feeling just a little sympathy for Harvard. Tough to turn down $400 million. But also horrible to think of turning Paulson into a hero. Thanks for being provocative.

    • John Fullerton

      Yes, a former colleague pointed me to Stanford, not a particularly nice fellow. How about a confessional before accepting the money? The irony is, I have since learned that Harvard lost $500mm for being on the other side of this mortgage trade. So Paulson still owes them another $100mm!!

  • nickgogerty

    quite curious to see my comment was removed.

    So much for transparency and openness at the Capital Institute. Tell John. I am seriously disappointed. The first part of humility and learning is being open to criticism and debate in either public or private forum.

    • John Fullerton

      little harsh nick. No one removed your comment and i’m not sure what you are talking about.

      • nickgogerty

        apologies, it may have been considered spam or a technical glitch. I retract.

        • John Fullerton

          accepted.

  • willszal

    There are ways that Paulson’s move could be considered in alignment with regenerative finance. The Deep Green Resistance Movement believes that civilization itself is inherently destructive. The extractive economy is the primary instrument of this destruction, so anyone who damages this economy, intentionally or not, is supporting the planet.

    In other words, the sooner we transition to a regenerative economy, the better. And collapse is a great way to bring in new modalities. I’m not saying that I condone this behavior, but I wouldn’t necessarily say it’s bad.