Nah, GS dumped their toxic inventory of rmbs on their clients, reducing their exposure by 8-10B.
Goldman Sachs E-Mail by Montag Described CDO as âShi**y Dealâ
- Thread starter ASusilovic
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Nah, GS dumped their toxic inventory of rmbs on their clients, reducing their exposure by 8-10B.
I am not arguing for regulation, rather enforcement of fraud statutes. Moody's and others should be up there as well, with Tourre, Birnbaum and Sparks, who is particularly culpable here.
I haven't changed my tune, but this testimony is going nowhere. All the mention of "shitty" notwithstanding. To prove fraud they needed to name Paulson. Buy GS now at 153.
Look. Of all the subprime loan, the biggest loans come from (un-regulated) lenders. This lenders all (funded) by the big banks to make this loans. Then the big banks buy this loans, bundle this loans, and sell.
Goldman Sachs and the other big investment banks KNOW THIS IS TOXIC. Look.
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"mega-banks not only invested in subprime lending institutions â they were the enablers, bankrollers, and instigators driving high-interest lending, and they did so because it was so lucrative and unregulated."
"The âSubprime 25â, which are mostly no longer in business, were largely non-bank retail lenders that needed outside financing to make their subprime loans. So where did that financing come from? The Centerâs study found that at least 21 of these Subprime 25 lenders were either owned outright by the biggest banks or former investment houses, or had their subprime lending hugely financed by those banks, either directly or through lines of credit. In other words, the largest American and European banks made the bubble in subprime lending possible by financing it on the front end, so they could reap the huge rewards from securitizing and selling mortgage-backed securities on the back end. The demand was insatiable, and the backing excessive."
"Did these major financial institutions not understand what kind of lending was taking place? The poor quality of these loans was no secret. Many of these subprime lenders, the Center found, were forced to pay billions of dollars to settle government charges of abusive or predatory lending practices. This was a period of some of the worst mortgage lending in American history, in which regulators were nowhere to be seen, and normal income documentation and loan standards were thrown out the window. In many cases, though, the big banks really didnât care if the loans were bad. Thatâs because theyâd bought âinsuranceâ against them â those infamous âcredit default swaps.â The swaps sounded good, except they were unregulated, and those selling them â like American International Group Inc. â didnât have to maintain reserves to guard against unforeseen losses."
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http://www.publicintegrity.org/investigations/economic_meltdown/articles/entry/1343/
Goldman Sachs and the other big investment banks KNOW THIS IS TOXIC. Look.
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"mega-banks not only invested in subprime lending institutions â they were the enablers, bankrollers, and instigators driving high-interest lending, and they did so because it was so lucrative and unregulated."
"The âSubprime 25â, which are mostly no longer in business, were largely non-bank retail lenders that needed outside financing to make their subprime loans. So where did that financing come from? The Centerâs study found that at least 21 of these Subprime 25 lenders were either owned outright by the biggest banks or former investment houses, or had their subprime lending hugely financed by those banks, either directly or through lines of credit. In other words, the largest American and European banks made the bubble in subprime lending possible by financing it on the front end, so they could reap the huge rewards from securitizing and selling mortgage-backed securities on the back end. The demand was insatiable, and the backing excessive."
"Did these major financial institutions not understand what kind of lending was taking place? The poor quality of these loans was no secret. Many of these subprime lenders, the Center found, were forced to pay billions of dollars to settle government charges of abusive or predatory lending practices. This was a period of some of the worst mortgage lending in American history, in which regulators were nowhere to be seen, and normal income documentation and loan standards were thrown out the window. In many cases, though, the big banks really didnât care if the loans were bad. Thatâs because theyâd bought âinsuranceâ against them â those infamous âcredit default swaps.â The swaps sounded good, except they were unregulated, and those selling them â like American International Group Inc. â didnât have to maintain reserves to guard against unforeseen losses."
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http://www.publicintegrity.org/investigations/economic_meltdown/articles/entry/1343/
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Your loan go to the CDO with the prime morgage long bias.
I have to go with trendlover on this one. The money to bankroll those retail mortgage pushers flowed through the investment banks like Goldman. And Goldman knew exactly what kind of "shitty" loans were being made, they probably even insisted on it. You don't suppose Goldman planned all along to package that crap, sell it to hapless investors, and then bet against it with Credit Default Swaps, do you? THAT would be a great way to limit risk. You control every aspect of a deal. What am I thinking! Have I lost my mind? Goldman wouldn't do a thing like that. That would be FRAUDULENT!