Matt Taibbi: The Wives Were Involved Too

a story by Matt Taibbi’s

The Rolling Stone writer who dubbed Goldman Sachs a “great vampire squid” has set his sights on a couple of glamorous Wall Street wives who may also suck.

In a revealing article in the new issue of Rolling Stone magazine, Matt Taibbi reports that Christy Mack, the wife of Morgan Stanley Chairman John Mack, and Susan Karches, the widow of the company’s former investment-banking division president, Peter Karches, are among the chief investors in a company that received $220 million in low-interest loans. The funds came from a federal bailout program that “virtually guaranteed them millions in risk-free income,” according to the article.

“This is what welfare for the rich looks like,” Taibbi writes in “The Real Housewives of Wall Street,” which appears in the issue of the publication that hits newsstands on Friday.

Taibbi writes that in 2009, Christy Mack and Susan Karches launched Waterfall TALF Opportunity, a company with a Cayman Islands address, although the two women did not seem “to have any experience whatsoever in finance.”

TALF stands for “Term Asset-Backed Securities Loan Facility,” which, Taibbi writes, is also the sleep-inducing technical name of the federal bailout “program that Mack and Karches took advantage of.” He explains that the federal aid they received “falls under a broader category of bailout initiatives designed” by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner.

Taibbi reports that with an initial upfront investment of $15 million, Waterfall TALF received $220 million in cash from the Fed, most of which it used to purchase “student loans and commercial mortgages.” He further explains that the loans were set up so that the investors “would keep 100% of any gains on the deal while the Fed and the Treasury (read: the taxpayer) would eat 90% of the losses.”

As of last fall, he continues, $150 million of the total the women borrowed had yet to be paid back. He also observes that the public has “no way of knowing how much” the investors earned on these transactions, because the Fed has “repeatedly declined” to provide information on how it priced the student loans and commercial mortgages Waterfall TALF purchased.

The Macks certainly don’t seem to be hurting. In August 2009, two months after Waterfall TALF launched, Taibbi reports that John Mack purchased a 107-year-old Limestone carriage house with a 12-car garage on E. 70th St. from Bunny Mellon for $13.5 million.

The women did not comment for Taibbi’s article, and a spokeswoman for Christy Mack did not respond to our request for comment by deadline.

26 Responses

  1. E. Tolle: Terrific compilation.

  2. Just listen to the hubris here….

    “We’re very important,” Blankfein is quoted as saying in The Times of London. “We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle.”

    Can’t help but see how well that’s working out!


    The following makes me want to club this idiot with a 2X12.

    In a discussion about morality and markets at St. Paul’s Cathedral in London, Goldman Sachs international vice chairman Brian Griffiths, a former adviser to Margaret Thatcher, described giant paychecks for bankers as an economic necessity. “We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” he said.

    Spoken to the lowly serfs.


    More banker insanity….

    And the New York Times recently quoted John Varley, of Barclays, telling an audience at London’s St. Martin-in-the-Fields that ”profit is not satanic.”
    Blankfein’s wry comment that he’s “doing god’s work” seems almost to be a veiled jab at this sort of religio-public relations push, which to a serious banker of Blankfein’s stature, must seem somewhat silly.

    Blankfein clearly knows who he works for. After all, God couldn’t afford him.


    On jailing bankers, one banker wrote:

    John Carney ripped this apart yesterday, point out all kinds of problems: It would viciously curtail risk-taking, it would be pro-cyclical (encouraging even more bank cautious at a time like now when banks are already underlending), and the complexity of these causes would be ill-suited for the criminal world — besides, all relationships in banking exist through a contractual, voluntary arrangement.

    So instead we’re left with no prosecutions and no lending, a banker’s wet dream. They can have it both ways!


    This is how they view the people who saved their asses…

    “I worked at the Bear Sterns … every word written here is true. Fact is, bankers regard themselves as wolves and the public as prey, and speak about it openly, among themselves.” Then he added a sucker punch: “What is extraordinary to me is how willingly the sheep submit to this.”

    And that’s our fault folks, for not getting more and more people educated as to what we’re dealing with here….maniacal, satanical bastards who believe themselves to be Masters of the Universe who can rape the populace whenever they need a little action. And for not calling weekly to our so-called representatives demanding change we can believe in, for once and for all.


    Then there’s this:

    In an interview with 60 Minutes on Sunday night, President Obama attacked “fat cat bankers,” saying “I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.”

    Of course he’s being truthful here. We all now know he didn’t have to run for the office, he was placed there by fat cat bankers.

    He went on to attack the banks for lobbying against financial-regulatory reform and said that he and Larry Summers would have a “serious talk” with the banks on Monday.

    Well we all know how well that went. Obama dropped to his knees and did something for the bankers that Lewinsky once did for Clinton in that same hallowed room. Knob polishing’s about all he’s good for.

    A tip from Saturday Night Live….

    “If you’re trying to convince people that you care about things other than money, may we suggest that you remove the words gold and sachs from your name?”

  3. Obama Get’s it He is part of the cover up.

  4. This bastards going to jail..

    I hope he doesn’t drop the soap

  5. ALEXANDRIA, Va. — A jury has convicted the majority owner of what had been one of the nation’s largest mortgage companies on all 14 counts in a $3 billion fraud trial that officials have said is one of the most significant prosecutions to arise from the nation’s financial crisis.

    The jury returned its verdict late Tuesday after more than a full day of deliberations.

    Prosecutors said Lee Farkas led a fraud scheme of staggering proportions as chairman of Florida-based Taylor Bean & Whitaker. The fraud not only caused the company’s 2009 collapse and the loss of jobs for its 2,000 workers, but also contributed to the collapse of Alabama-based Colonial Bank, the sixth-largest bank failure in U.S. history.

    Farkas testified in his own defense at the trial and claimed he did nothing wrong.

  6. so if you’re trapped in inflated prices because of easy credit, lending, you are trapped, worried about your FICO score, …………..thus you keep paying on your credit cards and home mortgage…………..thus the secondary market of securitized debt keeps flowing and trading…………and who benefits but Wall St & banks and hedge funds and so on………….but the little guy keeps working, and working to pay back the debt……………..on inflated prices because of speculation and wall street………..but the company you work for invests your pension/IRA in this wall street stuff…………….it is so circular…………… is called financial engineering but really financial manipulation so as to take fees and become a toll booth .

  7. Brian Davies I wish you the best.

  8. Brian Davies I wish you the best

  9. E Tolle,

    In watching your video link so far, I’m not done.

    Lord Blankenstein or however you spell this cue ball’s name, says…………

    “we the banking industry, wall st, rating agencies and other regulators failed to do was sound the alarm on too much lending and too much leverage in the system, credit had become too cheap,”

    Well, if I remember correctly, FBI was sounding the ALARM, Green span was sounding the alarm, independent economists were sounding the alarm…………..and and on.

    I myself was sounding the alarm, but I didn’t know how the SYSTEM worked, and Lord B says the SYSTEM in the video.

    What this *uck is saying is we trapped everybody in jacking up the prices and getting you, the public, to agree to refinancing or buying overpriced stuff including homes, going into debt endlessly on everything as the economy is booming, then these screwballs cut the credit, and everybody is trapped in inflated prices, and no doubt being in debt to those inflated prices. What a trap.

    I’m glad I defaulted on everything two years ago. Only two years to go for me on statue of limitations while these screwballs figure it out.

  10. Buy a Congressman for $1.4 million, or a Senator for $10 million–or all members of Congress for a mere $1.6 B

    *click link below & see picture of Obama & McCain (about halfway down the page) as they would appear if they were to wear sponsor patches similar to NASCAR drivers. doesn’t seem like voting actually makes a lick of difference, what options do we REALLY have other than to support the corporate stooges that make it to the top of the ticket?

  11. Got to hand it to those RICH liberal Progressives, they just love the POTUS cause he is making it that much more easier to PUT OT TO US while they rack in millions!

  12. The A Man ,

    I think you’re right ,, Obama’s supporters are finally getting it , just keeping my ears open I’m hearing nothing but dissatisfaction … In 2008 Obama needed Wall Street money ,, now I’m not so sure he does … perhaps his advisors will tell him to dump these bozo’s for another try at populist appeal… we may get the rule of law by accident… allowing GS/WF/etc. free reign to rape the country hasn’t really worked for Bernanke and little Timmy, we can’t afford to tax every single person in the country into unemployment and a homeless shelter to keep handing it over in various bailouts (TARP/AIG/discount window etc.) … I’d love to see Blankfein doing the perp walk along with 1000 of his “A”list friends.

    Maybe a few hundred million in donations through unverified internet charge card portal from each company will keep the CEO’s and CFO’s from bunking with Bernie ,, if they give up the hidden wealth and pay back REMIC related taxes I’m sure they can make a deal , it’s the Chicago way.

  13. @tn: If the random posts bother you so badly, why don’t you create your own blog?

  14. congrats Brian Davies for winning the most random comment of the day.

    Neil – please create a forum for general discussion. The comments system provided by WordPress only encourages completely off-topic postings since users have no other options.

  15. Davies motion for judgment on the pleadings to be heard on May 3, 2011. My oppostion to Deutsche Banks Motion. My Motion for judgment on the pleadings is on the same day.

  16. How do you make the jump from an excerpt of an article in Rolling Stone to “Obama is finally getting it”??

  17. It is ever thus. Having lived long enough to recognize habitual psychopathic behaviours in public figures, this is the most recent example of the ‘low-life’ who gets the ‘high life’. There is absolutely no discernible difference between Lloyd Blankfein and John Gotti with the exception that Gotti dressed better. Both are/were blatant in their display of ill-gotten wealth and dismissive of any attempt to reign them in. RICO also applies in both instances.

    The fact that the wives of these slugs also engaged in this bald and egregious theft only indicates how fully ‘protected’ they feel from any form of regulatory or judicial restrictions. They’re thumbing their nose at any and all forms of enforcement because there isn’t any.

    As for throwing the bums out, yeah, good luck with that! We’re all too busy trying to prevent them from throwing US out of our legally owned properties.. Without some concerted effort by a group of vocal and effective resistors we are doomed to read the news reports and watch the clips on telly with no legal recourse. The few of us who regularly read this site and others like it are a flea on an elephant’s backside and without a national strike or some form of organized withholding of funds, liquidation of savings and checking accounts and other forms of legal resistance they won’t even take note of our anger. Expect bigger and bolder examples of fraud because there are no rules thus no limits.

  18. Good reporting, Matt, but this is absolutely disgusting.

  19. Be careful we have very powerful friends.

    A must watch. Just like every alleged criminal organization they eventuall make one too many enemies


  20. Please call and let these vampire squid know that we are on to their game.

    John and Christy Mack (914) 925-0229

    They live in a nice gated community in upper suburbs of New York. How quaint. WITH OUR MONEY!!!

    Tell them you are an unemployed shit-shoveler and you hear they are “knee-deep” in shit up there. You want a JOB!

  21. A good Bankster is a Jailed Bankster
    I think Obama supporter are finally started to get it.

  22. Go back to last summer’s BIG LIE from Lloyd Blankein and watch him boldy assert GS’s school girl innocence here:

    If this guy and the other people who concocted the demise of the planet don’t start seeing three hots and a cot soon, it’s time to take over D.C. and run the clowns we elected out of town. Carl Levin appears to be 100% alone on his disgust with these idiots.

    Lloyd should call Martha Stewart and get some advice on how to handle himself when caught perjuring. Then he should visit Bernie and check out his accommodations. He’ll be booking a room soon.

  23. Why can’t we just take the money back or tie it up to they can’t use it or move it.

  24. Obama is finally getting it.


  26. WOW!!! Talk about ..Let them eat cake…. Time for some…. Off with your Head ! …. I bet this is just the tip of the Iceberg !!!

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