Memo to Henry Waxman

Lew Ranieri: Having last week cost the FDIC an estimated $1.5 billion in the floppage of his Franklin Bank, while simultaneously plotting a $1 billion venture with ex-GMAC veterans to buy…delinquent mortgages, the man who “helped turn Salomon Brothers Inc. into Wall Street’s most profitable firm in the 1980s by packaging mortgages and selling them as securities” could testify on the history of securitization, the advantages of getting on both sides of a trade, and the economic benefits accrued by lending huge amounts of money to people who can’t pay it back. 

Christopher Ricciardi: Reportedly preferring the accolade of “Grandfather of the CDO,” the record suggests “Johnny Appleseed of Toxic Waste” might be closer to the mark. While modestly declining credit (see sixth item) for his contribution to the incineration of Merrill Lynch, Ricciardi continues making waves in his latest gig as chief executive officer of Cohen & Company, whose Strategos Capital Management unit was earlier this year mentioned in dispatches as leading the “managers of CDOs in default” table with $14.2 billion to its name. His other areas of expertise include lobbying rating agency executives, and providing unsolicited advice to Treasury secretary Hank Paulson. 
 

Howard Rubin: One of the first ‘victims’ of an MBS blow-up, Rubin got the boot from Merrill Lynch in 1987 after getting on the wrong side, by an amount reported by various sources as being in the $250-$500 million range (known today as a “rounding error”) in an IO/PO trade; the event also earned him extensive coverage in Michael Lewis’s ‘Liar’s Poker.’ Rubin rehabilitated himself running the CMO desk at Bear Stearns before his retirement in 1999, and is now a director of several publicly-traded companies which share the common traits of omitting the words ‘Merrill Lynch’ from his biography and going to hell in a handbasket. Among them: Fortress Investment Group, an aggressive (if somewhat early so far) player in the distressed paper market, where his board colleagues include Daniel H. “My Name Is” Mudd, Phoney’s recently former chief executive. Rubin could doubtless offer many fascinating anecdotes about playas and their games, swapped over his various board room tables. 

Bruce Rose: The principal of Greenrich, Conn.-based Carrington Capital Management LLC securitized mortgages sold by some of the more malevolent sub-prime miscreants including Fremont General, H&R Block affiliate Option One, and New Century, a Carrington shareholder. Carrington also paid $188 million (or roughly $50 million more than it originally bid) for New Century’s mortgage servicing operation, which has doubtless given Rose the opportunity to modify at least several mortgages in an effort to keep people in their homes. As a pioneer in the now mainstream redemption phenomenon, he is also well-positioned to testify as to the fantabulous benefits accruing to his investors from declining to return their chips.
 

NakedShorts is convinced that these gentlemen would sincerely appreciate the opportunity to bring you and your committee up to speed on the value of their contributions to the nation’s financial progress. And these are only the ones whose last names start with R.