SEC charges GS with fraud

[Illum]

Quote from rcaldwell:

US gov't wants a piece of GS's hide. My money is on US gov't.

Yea I thought so too, but... other more experienced traders were sayin buy it up. I should have listened... again.. sigh.. I think I'm right, and the market tells me again, no. You hear Obama's speech? lol, he is such a pussy. GS owns his ass, he was almost apologetic. With all the hate on mainstreet and he stood there like a weasel. Dems are going to get voted out in force and he won't lift a finger, don't think he cares. Worst ratings for a leader since Nero, eh whatever. GS is runnin this place. This new reg will be a slush fund. Buy buy and lol to the bank, why not. Time to man up and just take what you can before this dump burns, nobody cares. And nobody can touch them. Sec is going to do jack. No perp walks, no nothin. Join the party. And if GS needs more money, they will raise your taxes. Buy it up. This 31 year old isn't going to sanctioned, he is going to V.P of the epic lolz division. Anyone see how fast Gartman changed his tune? He was hardcore bearish yesterday, today he was almost laughing. Yea Im with him. If you saw that cowardly performance at noon today, you'd flip too.

edit- I'm not being anti Dems, its the whole place. Just note how bearish Gartman was and the complete flip, he is on to it. Personally I was shocked. Others said not to be, so again, I was quite naive.

 

[Trader666]

Put down the crack pipe. Goldman repaid their TARP money + $425 million last June. The fact that Goldman was a counterparty to AIG doesn't negate that in ANY way.

Quote from Anaconda:

Oh wow they paid out the AIG CDSes and loan guarantees (all taxpayer money)? News to me.

 

[Trader666]

You know NOTHING about this. How about reading the case documents before making a fool of yourself? First, Goldman collected $15 million in "fat fees" but lost $90 million for a net LOSS of $75 million. Second, Paulson wasn't God back then and many even thought he was a fool. So your claim and the SEC's case are biased by HINDSIGHT. All participants knew the exact contents of the portfolio and all were experienced institutional investors so there were no material misrepresentations. Not to mention that Goldman's disclosures covered "conflicts of interest" like this and ACA knew which side Paulson was on anyway, etc., etc.
http://online.wsj.com/article/SB10001424052748704133804575198250280532696.html

Quote from Anaconda:

SEC's action is based on GS being in between the investors and Paulson, collecting fat fees. GS did not disclose to the investors that Paulson was the one advising the CDO manager on which MBSes to buy, while taking the other side. Obviously, if they had, the business would not be there, the deals would not be done and no fat fees.

 

[krazykarl]

Quote from dcunited:

Krazycarl-While I don't think it will prove illegal that Paulson's role should have been disclosed, it is quite shady. With something like a CDO there could be all sorts of crap in the final product, and the buyers are acting off of GS's reputation that they wouldn't intentionally screw them..which of course they were. Kind of like when you order one of those specialty beer cases online, you sort of expect them to be 24 DIFFERENT beers. GS made helped to insure you got 24 keystones. I'm sure the fine print will say they never said what exactly to expect, and this is how GS will get off.

Come to think of it GS is becoming more and more like my cable provider. They seem to find new and inventive ways of providing me with crappy service each month, yet legally they aren't at fault, and my other choices are even worse so I have to play ball.

No wonder why you guys are calling for blood.

You have to understand the people buying these things are SOPHISTICATED investors - not joe schmo with an etrade account. The buyers better not have fucking been acting off of "GS's reputation that they wouldn't intentionally screw them.." the should have been investing WITH THEIR HEADS AND WITH THE FACTS THEY GATHERED. Again, people need to put all this moral/ethical BS aside. There is always a loser in a trade, if these pips who bought this stuff didn't know that then they were the ones who committed fraud.

 

[Syprik]

Quote from Trader666:

You know NOTHING about this. How about reading the case documents before making a fool of yourself? First, Goldman collected $15 million in "fat fees" but lost $90 million for a net LOSS of $75 million.

Did you consider the strong possibility it made sense for them to buy the equity tranche in order to earn the fee? As a matter of course they would have hedged this equity exposure against cds, indicies, or other tranches, and so the fact that they lost money on this "side" of the deal is meaningless without knowing how they hedged it. They managed a large book of structured exposures and it would be standard practice to be long some tranches and short others, and overall carry a net flat or net long equity short senior or other risk exposure...etc etc. Everytime I hear people use this "they lost $90mil on this deal, thus .... ", I cringe as it's likely they bought the slick GS PR hook, line & sinker.

The more I read up on this dramatic episode, it is increasingly apparent the momentum will fall to the "highly unethical" side of ring, less so "illegal." The damage has been done and will continue to ripple. IMO any SEC fines will be a slap on wrist in comparison to reputation hit.

 

[wmb]

Quote from krazykarl:

You really have no idea how things inside a firm like this work, do you? Spare us sweeping statements on how "bad corrupt etc. etc. etc. things inside wall st..." are. It makes you sound inexperienced and a puppet of the TV news.

You are cutting and pasting several poster comments togehter aand commenting as if it is one! You sound like your confused!

 

[wmb]

Quote from krazykarl:

You have to understand the people buying these things are SOPHISTICATED investors - not joe schmo with an etrade account. The buyers better not have fucking been acting off of "GS's reputation that they wouldn't intentionally screw them.." the should have been investing WITH THEIR HEADS AND WITH THE FACTS THEY GATHERED. Again, people need to put all this moral/ethical BS aside. There is always a loser in a trade, if these pips who bought this stuff didn't know that then they were the ones who committed fraud.

The problem with GS is the same problem some of the posters of this thread have ;incredible arrogance! Condescending out of touch blatant arrogance! "not joe schmo with an etrade account" like who are you referring to yourself or all the posters on this thread! You need to take a frickin ethics class or maybe a business class from someone who has a backbone to tell you to frickin trade in the jungle where real trading takes place and if your not careful you just might get your skin handed to you!

No ones is expecting to have winners on every trade you fool! I just dont want to look under the hood and discover everything is in order and than find out later that all the parts were really made in china and not germany as the label said.

 

[Trader666]

I cringe every time I read the ignorant conspiracy theories of those who have obviously not read up on the case.

Quote from Syprik:

Did you consider the strong possibility it made sense for them to buy the equity tranche in order to earn the fee? As a matter of course they would have hedged this equity exposure against cds, indicies, or other tranches, and so the fact that they lost money on this "side" of the deal is meaningless without knowing how they hedged it. They managed a large book of structured exposures and it would be standard practice to be long some tranches and short others, and overall carry a net flat or net long equity short senior or other risk exposure...etc etc. Everytime I hear people use this "they lost $90mil on this deal, thus .... ", I cringe as it's likely they bought the slick GS PR hook, line & sinker.

The more I read up on this dramatic episode, it is increasingly apparent the momentum will fall to the "highly unethical" side of ring, less so "illegal." The damage has been done and will continue to ripple. IMO any SEC fines will be a slap on wrist in comparison to reputation hit.

 

[Trader666]

Actually, the problem is with jaded dullards like you who would rather make up bullshit than deal with the facts. You talk about others' arrogance, yet you're so arrogant you're making things up as if your delusions trump reality.

Everyone who took a stake was an experienced institutional investor who knew EXACTLY what was in the portfolio. Even the SEC isn't claiming that anyone was misled on what was "under the hood."

Quote from wmb:

The problem with GS is the same problem some of the posters of this thread have ;incredible arrogance!

I just dont want to look under the hood and discover everything is in order and than find out later that all the parts were really made in china and not germany as the label said.

 

[Syprik]

Quote from Trader666:

I cringe every time I read the ignorant conspiracy theories of those who have obviously not read up on the case.

What a childish, zero weight response. The fact you call such a common dealer hedging practice "conspiracy theory" confirms how little you know about this space. Straight forward question: Do you actually think they held onto this particular 0-9% equity tranche (=$90MM, strung with Baa2) without offseting? Do you realize that desk was short biased lower tier RMBS already months prior to Apr 27 Abacus AC1 finalization? Yet would still go naked on that particular equity? Funny.