SEC charges GS with fraud

[MarketMasher]

Tourre's take on ABX circa Jan. 29, 2007

http://www.businessweek.com/news/20...-mail-describes-frankenstein-derivatives.html

The so-called ABX index is “the type of thing which you invent telling yourself: ‘Well, what if we created a ‘thing,’ which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?’” Tourre said in a Jan. 29, 2007, e-mail released yesterday by Goldman Sachs. Watching the index fall is “a little like Frankenstein turning against his own inventor.”

A few months later, a June 13, 2007, e-mail shows Tourre claiming, “I’ve managed to sell a few Abacus bonds to widows and orphans that I ran into at the airport, apparently these Belgians adore synthetic ABS CDO2,” using short-hand for asset- backed collateralized debt obligations squared, or CDOs made up of tranches of CDOs containing asset-backed securities.


At least he has a sense of humor.

 

[RobtF]

Fab appears before Senate sub-committee next week - better that he keep that humor in check.

 

[asiaprop]

you are factually wrong. Please go back to the exact point in time when AIG made whole on its contractual obligations to GS. At that time GS was not anymore in danger of ever going under. I think you may want to get the time line of events straight.

Quote from ElCubano:

their exposure was enough to put them out of business. Why? because the counterparty who had the other side was going belly up. Even if they were on the right side of the trade, they would not have been paid and the tax payer had to pony up. Cmon, how can anyone argure this looking back? not to mention they were also stuck holding bad paper. I would wonder what they would have gotten for the swaps had AIG evaporated? A big goose egg.....and there is no need to insult, we all know very well how courageous people get behind their keyboards...

 

[asiaprop]

its gonna be a hilarious event. The same hilarious events when some outraged black congresswomen and men from the hood pretended they knew a thing about finance and made a complete fool out of themselves when they questioned ibank CEOs. The same applied to a number of other senators who really even lacked the most basic understanding of what was going on.

I think we all forget that most of this mess was caused by lack of oversight and a political push to "guarantee every last American has a right to own his own home".

In that I would love to see the full grilling session this week in full its gonna be very entertaining when a 31 year old MD tries to explain a mistake every firm in the world would be slapped in their face for and fined a sandwich amount of money. Instead the SEC is blowing this up completely beyond any proportions because they think this is the opportune time to give the proposed financial bill a push in the ass. I bet with you they get nothing out of this other than GS trying to settle without admitting or denying wrongdoing. THats gonna be it, I believe. THe reputational damage to GS is huge and GS will do anything to get out of the front pages asap.

Quote from RobtF:

Fab appears before Senate sub-committee next week - better that he keep that humor in check.

 

[bwolinsky]

Quote from asiaprop:

I bet with you they get nothing out of this other than GS trying to settle without admitting or denying wrongdoing. THats gonna be it, I believe. THe reputational damage to GS is huge and GS will do anything to get out of the front pages asap.

Unless there are those of us knowing a financier has more nuts than a fruitcake underneath him, this <i><b>is what is most likely to happen, I agree.</i></b>

 

[Trader666]

Actually, you're a fool for thinking you have the "inside scoop" on Goldman. Specifically, you claimed Goldman was hedged and therefore didn't lose $90 million:

the fact that they lost money on this "side" of the deal is meaningless without knowing how they hedged it... 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.
http://www.elitetrader.com/vb/showthread.php?s=&postid=2814281#post2814281

I tried to explain to you that it wouldn't make sense for them to lie about it but you wouldn't listen. Now I see that Goldman's co-general counsel said they lost even more:

Our overall losses in connection with the transaction exceeded $100 million including $83 million with respect to the retained long position.
http://www.marketwatch.com/story/top-goldman-lawyer-disappointed-with-sec-charge-2010-04-20

What are the odds that Goldman's attorney would lie about this on a conference call? Does your rube brain understand how serious that would be? Probably not.

Better climb back up on that turnip truck you fell off of because on the ground, you see a conspiracy behind every blade of grass.

Quote from Syprik:

I'm a fool for having not seen your character from a mile away. At first I thought you were just misinformed, but it's now evident you are nothing but a common ET troll.

Your lack of a remotely competent retort says it all. What I was trying to impress upon you simply went straight over your head. It's quite sad. Either you are trolling because your ego has been bruised, or you are flat out incompetent. I'd wager both.

You are now on ignore.

 

[wmb]

Quote from asiaprop:

you are factually wrong. Please go back to the exact point in time when AIG made whole on its contractual obligations to GS. At that time GS was not anymore in danger of ever going under. I think you may want to get the time line of events straight.

Saturday, December 12, 2009
|

POLITICSDECEMBER 12, 2009.Goldman Fueled AIG Gambles
Wall Street Titan's Role Shown in Journal Analysis; Firm Says Problems Hidden .

Goldman Sachs Group Inc. played a bigger role than has been publicly disclosed in fueling the mortgage bets that nearly felled American International Group Inc.

Goldman was one of 16 banks paid off when the U.S. government last year spent billions closing out soured trades that AIG made with the financial firms.


.Goldman originated or bought protection from AIG on about $33 billion of the $80 billion of U.S. mortgage assets that AIG insured during the housing boom. That is roughly twice as much as Société Générale and Merrill Lynch, the banks with the biggest exposure to AIG after Goldman, according an analysis of ratings-firm reports and an internal AIG document that details several financial firms' roles in the transactions.


When Goldman didn't get as much collateral as it wanted from AIG, in 2007 and 2008 it bought protection against a default of AIG itself from other banks.

AIG officials were skeptical of the prices Goldman presented, according to the minutes of a February 2008 AIG audit committee meeting, which noted that Goldman was "unwilling or unable to provide any sources for their determination of market prices."

Additional calls for collateral from Goldman and other banks eventually led to AIG's September 2008 bailout and led the New York Federal Reserve two months later to fully cover $62 billion of insurance contracts Goldman and 15 other banks had with the financial products unit of AIG.



Goldman received $14 billion for its trades that were torn up, including $8.4 billion in collateral from AIG.

t. r the Troubled Asset Relief Program, which recently reviewed the New York Fed's effort to stanch collateral calls last year, said Goldman officials said the company believed it would have been fully protected had AIG been allowed to fail because of collateral it had amassed and the additional insurance it had bought against an AIG default.

The auditor, however, questioned that conclusion. The report said Goldman would have had a difficult time selling the collateral and that the firm might have been unable to actually collect on the additional insurance.

—Amir Efrati
contributed to this article.
Write to Serena Ng at serena.ng@wsj.com and Carrick Mollenkamp at carrick.mollenkamp@wsj.com

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[wmb]

Quote from asiaprop:

its gonna be a hilarious event. The same hilarious events when some outraged black congresswomen and men from the hood pretended they knew a thing about finance and made a complete fool out of themselves when they questioned ibank CEOs. The same applied to a number of other senators who really even lacked the most basic understanding of what was going on.

I think we all forget that most of this mess was caused by lack of oversight and a political push to "guarantee every last American has a right to own his own home".

It has taken me some time to get over this YOUTUBE video. However, I now view it as a with some amusement for all you assholes who want to defend bullshit among corporations and our government! The house is burning! LET IT FALL


http://www.youtube.com/watch?v=VgctSIL8Lhs&feature=player_embedded

 

[Anaconda]

Quote from rude:

Hindsight is 20/20 (damn fool), at the time nobody knew that these assets would be toxic.

Really? Nobody knew or had an idea that it was obvious worthless crap?

You're really naive.

 

[ElCubano]

Quote from Anaconda:

Really? Nobody knew or had an idea that it was obvious worthless crap?

You're really naive.

Either they lied, looked the other way or Wall Street was actually the dumb money this time around.