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LincolnArmy
Registered: Jun 2007
Posts: 130 |
08-11-12 02:17 AM
No real surprise is it. Satan's little helper, Lloyd Blankfein's off the hook again.
If only Obama would offer us the head of Jon "the cunt" Corzine on a stick to make up for this. Wouldn't that be a great gesture...
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Josef K
Registered: May 2008
Posts: 91 |
08-11-12 04:40 AM
Quote from trendlover:
[B]Remember? I can not understand why someone can "pick" portfolio to sell, (AND) bet against the portfolio. So the law is this is not criminal?
No, it isn't criminal, it's just something called short selling.
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hft_boy
Registered: Apr 2012
Posts: 177 |
08-11-12 06:18 AM
Quote from Josef K:
No, it isn't criminal, it's just something called short selling.
Yeah. I don't get it, why is GS taking all this crap for this? What, did GS's clients like, think that when they were buying those products, GS was just giving them free money? Obviously GS (or somebody on the other side) thought they were getting a good deal.
Apparently at the time, everybody was fighting hand over fist to get their hands on these securities and they all thought Paulson was crazy.
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trendlover
Registered: Nov 2007
Posts: 3621 |
08-11-12 05:04 PM
Quote from Josef K:
No, it isn't criminal, it's just something called short selling.
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"Paulson was the transaction sponsor of ABACUS. Paulson: paid Goldman Sachs $15 to $20 million to structure, underwrite and sell ABACUS; specified the parameters of the collateral to be included in the reference portfolio; specified the RMBS to be included in the “initial reference portfolio”; proposed additional RMBS to be included in the final reference portfolio; and vetoed specific RMBS that ACA proposed be included in the final reference portfolio.25. Goldman Sachs misrepresented to ACA that Paulson had pre-committed to take a long position in ABACUS --
i.e.
, that Paulson had an economic incentive to select reference obligations that would perform. In fact, through a separate CDS between Goldman Sachs and Paulson that Goldman Sachs concealed from ACA (the “GoldmanSachs-Paulson CDS”), Paulson purchased from Goldman Sachs the protection on the reference portfolio that Goldman Sachs had purchased from the SPV, making Paulson the ultimate and undisclosed protection buyer (the short investor) in ABACUS --
i.e.
,that Paulson in fact had an economic incentive to select reference obligations that would default. The Goldman Sachs-Paulson CDS was not discoverable through any publicly available source of information."
http://www.scribd.com/doc/81902780/...ended-Complaint
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trendlover
Registered: Nov 2007
Posts: 3621 |
08-11-12 05:20 PM
"By 2006, Paulson was convinced that the market for subprime RMBS was on the verge of collapse. Unsatisfied with the enormous profits it already expected to make by shorting individual RMBS and other securities linked to residential mortgages,Paulson sought a way to make a billion dollar profit on the failure of a portfolio of RMBS through a single transaction. Paulson did not want to take the short position in just any portfolio of RMBS but in a portfolio of RMBS that it had selected and believed was most likely to default.29. By fall 2006, Paulson had identified the characteristics of RMBS that it expected to default in the near future. Paulson then set out to find an investment bank that would structure, underwrite and sell a synthetic CDO with a reference portfolio including RMBS with such characteristics and broker Paulson’s purchase of protection on that portfolio.30. At least one investment bank that Paulson approached before approaching Goldman Sachs declined to assist Paulson out of concern for its reputation. Scott Eichelof Bear Stearns, who reportedly met with Paulson several times, has been quoted as saying that Paulson wanted:especially ugly mortgages for the CDOs, like a bettor asking a football owner to bench a star quarterback to improve the odds of his wager against the team."
http://www.scribd.com/doc/81902780/...ended-Complaint
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trendlover
Registered: Nov 2007
Posts: 3621 |
08-11-12 05:32 PM
' Thus, on January 4, 2007, as recently disclosed by the Subcommittee,Goldman Sachs approached GSC Partners (“GSC”), an institutional investment manager,to act as the portfolio selection agent for ABACUS. At a meeting the next day, as reflected in an e-mail recently made public by the Subcommittee, Goldman Sachs,Paulson and GSC expressly disclosed that Paulson intended to short the reference portfolio of ABACUS. GSC declined to act as the portfolio selection agent because ABACUS posed “reputational risk” for GSC and the CDO market as whole. Indeed, on February 27, 2007, when Goldman Sachs began to market ABACUS notes, a senior trader at GSC sent an e-mail to the head of Goldman Sachs’s CDO Origination Desk,stating: “I do not have to say how bad it is that you guys are pushing this thing.”. Goldman Sachs Misrepresented to ACA that Paulson’s and ACA’s Economic Interests in ABACUS Were Aligned. As explained in an internal Goldman Sachs e-mail regarding the“ACA/Paulson post,” it was:[Goldman Sachs’s] idea to broker the short. Paulson’s idea to work with a [portfolio selection agent]. [GoldmanSachs’s] idea to discuss this with ACA who could do super senior [wrap] at the same time . . . .. On January 8, 2007, ACAM met with Paulson at Paulson’s offices in NewYork City, where they discussed the proposed transaction, including, among other things,the RMBS to be included in the reference portfolio. In contrast to the candid disclosureto GSC of Paulson’s short interest in ABACUS, Paulson did not disclose to ACAM that Paulson intended to short the reference portfolio."
http://www.scribd.com/doc/81902780/...ended-Complaint
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