Felix Misses the Lede on Greek Derivatives

Fascinating followup from Felix Salmon on the Greek derivatives, although I think he misses the lede. He goes with "Goldman wasn't at fault," which is a contentious call. Far more interesting to me is that it turns out that the story is old news. Evidently, as Felix documents, it was all laid out in perhaps-agonizing detail in Risk magazine back in 2003. Even more interesting (for my money) --evidently the prospect of such a deal was an active topic of discussion among Euro bloc accounting rulemakers--why, a suspicious nature would infer that they planned the rules with this deal in mind. So all the gasping and harrumphing today is just a charade.

I guess I follow Felix's argument about Goldman but I'm not sold that they are off the hook. If the Sovereign State of Apoplexia chose to legalize kiddie porn, Goldman would be free to say thanks but no thanks. Moreover I think it might be instructive to dust for fingerprints around the conference room in which they wrote that protective accounting rule. Mr. Goldman? Mr. Sachs? You, here? My, this is a surprise...

BTW I may be too attuned to the task of making complex matters simple, but at the end of the day this deal sounds to me like nothing more than a souped-up space-age version of the old "concealed loan" dodge. Going back to the Middle Ages when good Christians under threat of hellfire had to hire Jews to do their financial scut work, we've known how put lipstick on this pig. No, no, I won't loan you $100. But I will pay you $100 for your widget. On condition that you agree to buy it back from me for $125. Usury? Oh, bite your tongue...

Bonus 20-20 Hindsight Inquiry: I know, easy for me to say--but aren't we permitted to roll our eyes just a tad at the idea that the New York Times never tumbled to the old-news aspect of the case before showcasing it on page one, column eight? Defenders will say--wal, a seven-year-old story in a trade pub is pretty obscure. I hear you. But I thought the reason we all bought the Times is that these guys have the specialized lifelines that the rest of us don't enjoy. Floyd? Gretchen? Andrew? Though come to think of it, perhaps it is also interesting that none of these glamour bylines was on the story.

And failing direct knowledge, you'd think just one of their sources might have said: you know, this isn't really a secret. Why, it ws in the trade press back in '03.