The Writers Coin

I watched a couple hours of the Goldman hearing held yesterday in Washington, DC that featured US Senators grilling Goldman Sachs executives. I’ve never really paid attention to hearings like these, but after watching yesterday I have to say that this stuff is fascinating.

There were so many things happening at the same time, it was tough to keep track:

• Presumably, they were there to discuss the SEC charges against Goldman, which they sometimes hit on
• The senators were there to look good in front of the media as they wagged their fingers at Wall Street
• Goldman was there to take the fall for the mortgage crisis, which it did not cause
• The Goldman guys were there to not look stupid and protect the firm

Why is this so interesting? Because both the Senators and the Goldman guys are really smart dudes—but the Senators (as one admitted) don’t have the capacity to really understand all the details of how all this stuff worked. It’s not easy. They did their homework the night before, read all the papers and books (including The Big Short!), and then went out there to wag their fingers in Goldman’s face.

Why? Because they represent the people, and the people are angry. They’re angry about massive job losses, angry about their 401(k) losing so much of its value, angry that CEOs were making money hand over fist even though they messed up big time with the bets they took in the mortgage industry.

And the use of that word—bets—was in full effect during the hearings. The senators made a point to compare what Goldman did to a casino that stacked the odds against everyone else and then sat back to collect the money. Which is oversimplifying A LOT of what happened and is also wrong. The senators acted as if Goldman knew what was going to happen in the future and then acted illegally (or at least immorally) to reap massive profits from that information.

Some of the questions they asked Goldman were astounding. Senator McCain asked the Goldman CEO what he thought about community banks being in so much trouble. He asked him how much he got as a bonus last year ($9 million), and he asked him what he felt about the American people being in such a tough spot right now. Then he threw out something like “But you’re doing pretty well, aren’t you?”

What the hell does that have to do with anything? Absolutely nothing, and that’s why yesterday was so interesting. This was the biggest economic collapse in the history of this country since the Great Depression, and someone has to take the blame. And if you watched yesterday, it’s clear who Congress wants to point the finger at—Goldman Sachs. The people need a villain, and right not it looks like it’s going to be Goldman Sachs.

You Can’t Handle the Truth

Senator Coburn then chimed in with something I thought was pretty brave: he pointed out that 90% of the mess was Congress’ fault—they only hold these hearings retroactively, never before something bad happens. Bravo to you Senator Coburn: amidst the bashing and blaming of Goldman, you came out and spoke honestly instead of just piling it on some more.

It was quite the show.

But is any of it right? Did Goldman Sachs do anything wrong? After all, that’s the point of the SEC charges—that Goldman broke the law by creating a product that one client believed was “built to fail” while selling it to other clients.

I don’t see the conflict of interest. First of all, Goldman had no way of knowing what was going to happen. As we saw in The Big Short, some people were pretty sure that certain tranches of mortgage securities were going to blow up. But no one knew for sure. And even if they believed that these products were going to fail, is it their job to stop others from exposing themselves to the risk they’re looking for? Should Scottrade stop me from buying a stock because it “knows” or “think” it’s a shitty stock?

I don’t think so. I think if an institution or person wants to buy X or Y security from Goldman, Goldman’s job is to sell them the security.

No one knew exactly what was going to happen—including Goldman.

I am Not a Goldman Apologist

Let me get this straight—if it’s illegal to do what Goldman did (I don’t really know, but it doesn’t sound like it should be), they should be punished. Reform needs to happen. But what I don’t like is when people lay blame or make up their mind without knowing all the facts. And that’s what makes this so tricky—I bet 70% of the population can’t really understand (and doesn’t really care to understand) what happened, how it happened, and how to fix the problem.

All they have to do is read The Big Short and you’d get an entertaining, in-depth view of the crisis and how it blew the economy up. Goldman had some to do with it, but that was after lenders were giving out irresponsible mortgages to irresponsible buyers. I get very frustrated and upset when these knee-jerk reactions and decisions are made:

• Goldman made money of the crisis (they lost a ton too) and so therefore they are evil.
• The CEO got a $9 million bonus and so he did something wrong.
• Money is evil.

We’re not idealistic teenagers anymore that have these short-sighted opinions about the world. We should dig a little deeper and try to learn what the root cause of all this was. It was irresponsibility. It was lack of proper oversight. It was leverage. It was greed.

But if you’re going to put everyone that falls under those categories on the stand, it’s going to be one hell of a long hearing.

Anyway, there are hours and hours of video on this out there, but here is a clip of Goldman CEO Lloyd Blankfein on the “stand:”

I recently stumbled into Chris Guillebeau’s site, The Art of Non-Conformity. I remember reading it a LONG time ago and even downloading his Brief Guide to World Domination a while back. Anyway, one thing led to another and the next thing I knew I was on the verge of buying one of his products called The Empire building kit. But there was a time limit on how long he would keep it available—then he would close it up and not sell it again for a month or so.

And I’m not real good under pressure like that, so I didn’t buy it.

But he made such a good impression on me, that I cruised the other products he has up in his store and found something else I liked: Create Your Own Freedom: Break Out of the 9–5. He does such a good job of presenting his products in an attractive, honest way, that I was immediately drawn to this guide. It didn’t take me long to dig in and buy it (click here to use my affiliate link and I’ll get a cut of the purchase price if you buy anything from him). I’ll be doing a full review later on but for now I wanted to share my own thoughts on creating a product like Chris’ and whether there is enough interest out there for it.

I’m thinking of creating a “How to Make More Money” guide/ebook. The guide will focus on the strategies you can execute to make more money in your life as a salaried employee. Sorry it won’t be as exciting as “busting out of the 9–5 grind” or “making money while drinking daiquiris on the beach,” but there is a reason for it: most people out there don’t want to do it. Most people just want to take their existing situation and make it better. Or they want to get a new job that pays better and is more satisfying at the same time. Starting a business is not for everyone.

Here is what the guide won’t be about:

• Tips and tricks to make money on the side
• Strategies to save more of the money you already make
• Making money by investing in stocks
• Making money by storing money in high-yield savings accounts

Anyway, I’d love some feedback on this. Is this of any interest to you? Would you like to know how to up your pay at your current job or read about the different things you can do to set yourself up for a higher-paying job at a new place? Shoot me an email or use the fancy new contact form I added here.

I’m very eager to hear what you all have to say.

I apologize to everyone who checks the site regularly expecting another brilliant, entertaining romp through the madness that is personal finance. I have been busy lately and haven’t been posting. For that, I apologize. Here’s what’s been going on:

• M and I moved into our new place
• Work
• Side projects

So while it’s all very exciting (except for #2), that’s no excuse for not posting. After all, I have ideas, it’s just time that I need more of. Maybe I’ll try to read Getting Things Done again. I will say one thing—the more stuff I want to get done, the more productive I am with the same amount of time I have. So my post on getting things done by having less time seems to be holding true.

Anyway, today I want to talk about moving because that’s the big thing that’s going on in my life.

Moving SUCKS

We all know this—it’s what we call “a truism.” It’s also one of those things you forget about after some time passes. Your mind starts to forget how horrible it really was. You start to say things like “It wasn’t that bad” or “it could’ve been worse.” Let me set the record straight: I hate moving so much that I would rather spend more money than I have to to avoid it.

This is not a trivial thing for me to say. We’re talking about the guy who eats the same sandwich every day to save $2,000/year. I hate spending money.

But moving is my kryptonite—I give in to it’s powerful will. I am no match for the destruction and havoc it brings on us humans. Here is a list of things that happened thanks to our recent move:

• Our sofa got torn up and now needs to be replaced (not cheap)
• It was raining and me and the two guys that helped out got soaked
• I was very ornery
• My arms are still black and blue from the bruises
• My arms have cuts on them from carrying things that were too heavy
• There were four flights of stairs
• The stairs were in the back…outside…in the rain.
• One of the guys helping me out fell off the truck (slipped actually, because of the rain) and hurt his back.

And this is all with help! M and I paid around $250 for two guys to help us move things for four hours. Which is a pretty good deal when you count the only other expense: $39 for the U Haul. That’s a total of less than $300!

In case you’re wondering—that’s a steal! But I won’t be looking for a bargain next time I move. I have learned my lesson. I would rather pay $1,000 and not lift a finger—I was so anxious the night before and so defeated for the two days it took to move that I don’t want to ever feel that way again.

This is another one of those times where money helps. It’s one of the good reasons we have for wanting to have more of it. This is a perfect example of how money helps.

Anyway, I’m convinced—paying a premium for movers to do all the work is worth the money. But I took this thought to the GetRichSlowly forums and a lot of people disagreed. They still think the best way to go about it is still the “friends, pizza, and beer” recipe. Good for you. Go save your money for something that really matters to you.

As for me, I’ll keep eating the same sandwich so that next time I won’t feel what I felt during this past move. For more of my whining on how moving kicked my ass, check out this post.

This post was included in the Best of Money Carnival over at Fiscal Fizzle, the Personal Finance Carnival, and the Carnival of Money Stories at Buxr.

Image by Katie Tegtemeyer

To celebrate the release of my favorite author’s new book, The Big Short, I wanted to share the interviews 60 minutes aired last night that shed some more light on the stories in his new book. In case you missed my Michael Lewis is awesome post, check out the Vanity Fair excerpt of his book.

Part I:

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Part II:

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An extra segment on Michael Burry:

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