Use access key #2 to skip to page content.

starbucks4ever (97.39)

My coffee was too hot

Recs

17

April 16, 2010 – Comments (7)

So GS gets their comeuppance from the SEC. Nobody should cry for GS if they are fined for their lies and misrepresentations. But what about their counterparties? They lost $1 billion because GS did not tell them that Paulson felt bearish about their CDOs? Excuse me, but these people were not some Norwegian fishermen. They were professional financiers who should have known how to analyze securities. So how exactly were they defrauded of their money? Because GS forgot to tell them that security prices can go in both directions? Give me a break.

There is a much simpler answer. They were deceived because they were only too happy to deceive themselves. Subprime CDOs looked to them like a good risk so they wanted to get the kind of advice from GS that would justify taking this risk. Sure enough, GS delivered exactly what the customers wanted.

It takes two to tango. 

7 Comments – Post Your Own

#1) On April 16, 2010 at 3:37 PM, Option1307 (29.72) wrote:

Sort of reminds me of the Madoff scheme. Everybody knew it was too good to be true, but nobody gave a crap when times were good. Once it blew up everyone was yelling "fraud.

Well no Shi*t! You knew it was too good to be true but did nothing to stop it as long as you were scoring big time from the fraud and deception, as soon as you started losing, you started complaining. I have no sympathy for GS of the counterparties. I hope they get what they deserve.

On that note, happy friday Fools!

Report this comment
#2) On April 16, 2010 at 3:44 PM, Starfirenv (< 20) wrote:

What? Exactly what the customers wanted? As in lose $1B? As a rusult of  " their lies and misrepresentations"?
So, there should be no fiduciary duty, accountability, or ultimate responsibility for those who craft, giftwrap and pitch these products dishonestly or the Fin Ind as a whole? Sounds like you're long Financials.  I'd like to see the treble damage Tango turn into a trend. Globally. Mr Market could use some "soap and water" right about now. And some deoderant. Regards.

Report this comment
#3) On April 16, 2010 at 4:03 PM, Option1307 (29.72) wrote:

So, there should be no fiduciary duty, accountability, or ultimate responsibility for those who craft, giftwrap and pitch these products dishonestly or the Fin Ind as a whole?

There certainly should be accoutability and companies should pay the price for actively deceiving others; however, the point is that many of these "investors" were in actuality mega financial institutions and they knew damn well what they were getting themselves into. Well, at least they had advisors that were supposed to know what they were doing. What I'm getting at is that it wasn't your average, unknowledgeable, investor getting defrauded. These were big time players that were all too willing to go along for the ride until the bottom dropped out.

Report this comment
#4) On April 16, 2010 at 4:16 PM, TMFDeej (99.40) wrote:

Drug dealers give junkies and hookers give johns exactly what they want, but it doesn't make their actions legal does it?  I have a feeling that GS may actually get more than a slap on the wrist for this one.

Report this comment
#5) On April 16, 2010 at 4:23 PM, Option1307 (29.72) wrote:

Holy geez, you're alive Deej! Hope all is well and this is a sign of a return to your blogging.

Drug dealers give junkies and hookers give johns exactly what they want, but it doesn't make their actions legal does it? 

To be clear, I'm not saying GS was right. In fact I hope GS goes down in flames for this crap they've been pulling for the last decade or two. All I was getting at is that there are two sides here, and both parties are likely guilty. But yes, GS is super super guilty and completely full of bs!

Report this comment
#6) On April 16, 2010 at 5:12 PM, Starfirenv (< 20) wrote:

#2 Was in response to the Post as there were no comments at the time.
Option- If what you are saying is profit motive existed on both sides of the line, I agree. The problem is one side had the advantage thru fraud and deception, as well as abusing their position as Advisor to abet and manipulate and profit from this scheme. Just read a piece where the "20 something" yr old V.P. for GS, (Fabrice Tourre, since  promoted to executive director of Goldman Sachs International in London) who created these "instruments" told a friend (referring to himself in an e-mail) "the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!" Cant wait till GS gets their day in the Dutch     (841M) and the German courts (150M). Except if they are bailed out with taxpayer $. Keep an eye on Milan and JPM too. Regards.

Report this comment
#7) On April 16, 2010 at 9:50 PM, starbucks4ever (97.39) wrote:

"Drug dealers give junkies and hookers give johns exactly what they want, but it doesn't make their actions legal does it? "

Oh come on, can't we have a red lights quarter for Goldman and clients? :)

Report this comment

Featured Broker Partners


Advertisement