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Jim Cramer vs Sylvain Raynes, who is Mr Raynes?

CNBC never comes up short when it comes to providing circus but a recent interview panel discussion of the Goldman Sachs fraud sticks out as being unusually odd.

The Panel consisted of:
CNBC Anchor: Erin Burnett
CNBC Analyst: Jim Cramer
CNBC Analyst: David Faber
Guest Expert: Sylvain Raynes

When it was Sylvain Raynes turn to speak, he proceded to trash CNBC and Cramer specifically. It was as if someone had briefly let Triumph the Insult Dog loose on the set of CNBC, a surreal experience.

Raynes: "Thank you Erin, I’m pleased to be on this show since most of your previous guests were public relations officers for Goldman"
Cramer: "I don’t like to hear that! I’ve questioned Goldman many times, I don’t need to hear that nonsense"
Raynes: "Mr Cramer, it’s pronounced Abacus not Abaackus"
Raynes: "We don’t have time to go into details, I want to remain shallow in deference to Mr Cramer."
Burnett: "hey hey hey I asked you to not say derogatory things"
Cramer: "What’s this ad hominem nonsense, come on partner"

Burnett: "We’re gonna take a brief break there, well be back in a second. Sylvain will not be with us. Sylvain you gotta be more polite than that."

So what’s this all about? Is it just another example of why sane people do not watch CNBC for any reason other than as circus entertainment? Or is there more to this story? Cramer is certainly an easy enough target but Mr Raynes seemed to pretty much make a jerk of himself attacking Cramer. Why go so far out of your way to earn a perma ban from all the mainstream networks? Who is this Raynes guy? Does he have a new book out? What’s he peddling?

I don’t know who the previous guests were on CNBC regarding the Goldman Sachs fraud case but I did some background digging on the 4 people in the given clip.

Erin Burnett – former Goldman Sachs employee
Jim Cramer – former Goldman Sachs employee
David Faber – from Cramer’s days as a trader, Trading with the Enemy describes Cramer feeding Faber tips and illegally trading ahead of Faber’s reports on CNBC

So that’s the cast of characters that CNBC puts "on the case" of the SEC’s Goldman Sachs fraud charges. "Public relations officers for Goldman" starts to look like a pretty accurate statement.

But who is Sylvain Raynes and why in the world would CNBC put him on a live show?

My guess is that he was on CNBC because he was quoted in the original Gretchen Morgenson piece on the Goldman abacus fraud back in Dec 2009. From that article:

"The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

What is Mr Raynes background? He’s a financial math geek, a former moody’s rating agency employee who worked on rating exotic assets. And he’s the author of The Analysis of Structured Securities: Precise Risk Measurement and Capital Allocation.

From this McClatchy article on Moody’s putting profits ahead of reputation:

In the 1990s, Sylvain Raynes helped pioneer the rating of so called exotic assets. He worked for Clarkson.
“In my days, I was pressured to do nothing, to not do my job,” said
Raynes, who left Moody’s in 1997. “I saw in two instances — two deals
and a rental car deal — manipulation of the rating process to the detriment of investors.”

It doesn’t look to me like Mr Raynes is selling anything. It looks more like his comments are driven by pure contempt for both CNBC and Jim Cramer in particular for lying/obfuscating to protect pension fund thieves. And it’s entirely possible that he is bitter that his personal career path has been adversely effected by an industry which only rewards koolaid drinking yes men. Moody’s didn’t want Raynes for his math skills, they just wanted someone with math credentials to sign off on thier frauds. So Raynes left Moody’s and wrote a book on how he felt the job should be done.

That doesn’t exactly vault Mr Raynes into the hero catagory along side Brooksley Born, Bill Black or Edwin Gray. But it certainly does make me wonder how many Sylvain Raynes there are out there. Bright, educated, koolaid dodgers who are extremely bitter and entirely unwilling to tow the line, consequences be damned.

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