Jimmy Hoffa Would Be Very Proud

Somewhere deep below Giants Stadium lies a man who is quite happy that the International Brotherhood Of Teamsters stuck it to Goldman Sachs.

http://www.risk.net/risk-magazine/news/1589502/goldman-halted-market-yrc-creditor-claim

"Goldman Sachs stopped making markets in bonds and credit default swaps (CDSs) on US freight company YRC Trucking for around two weeks from December 16, as part of an effort to stave off a public relations catastrophe. The decision to stop quoting on YRC is understood to have been taken at a very senior level in Goldman, after freight union International Brotherhood of Teamsters (IBT) sent letters to congressmen, senators and state attorneys-general accusing the bank of encouraging investors to torpedo YRC's restructuring - which would have threatened the jobs of around 30,000 IBT members."

The lengths to one would go to fund the Goldman Sachs bonus pool.

"The story made the pages of the tabloid New York Post on January 9, which declared Teamsters boss James P Hoffa had "stared down Goldman Sachs and the big-money crowd on Wall Street and come out a winner."

This is what we need. We need everyday people who have been destroyed or about to be destroyed go and make a stink to their elected officials. People don't change on their own. They need to be cattle prodded.

"But the episode has also sparked concern that failing companies could use political pressure to strong-arm banks and investors into backing restructurings.

YRC is the first case in which allegations of so-called ‘empty creditor' behaviour have gone public, although disquiet has been growing over the past 12 months In theory, an investor that buys bond-plus-CDS packages in a distressed company is incentivised to see the company fail - the CDS would trigger and the investor would get paid at par on bonds bought cheaply - but critics have yet to catch empty creditors in the act."

Cry me a river. Is this not what the banks do? The IBT just did to the banks that the banks did to the economy. The IBT made Goldman Sachs do their bidding, similar to the way Goldman made AIG, then the NY Fed, then subsequently the US Taxpayer play by their rules

"And then we knew there were newer investors trying to profit on a default, as half a dozen anonymous tips came in telling us entities were making markets in CDS packages on YRC," says Iain Gold, director of strategic research at IBT in Washington, DC. "We made it clear we would hold people accountable and they should factor into their decision process they could put 30,000 people out of work if the exchange failed."

I am not completely condoning the actions of the IBT with their defense. But it did potentially save 30,000 jobs.

Goldman got played a like a fine Stradivarius.
Bravo to the IBT!