Skip to comments.U.S. will not prosecute Goldman Sachs, employees for Abacus deal
Posted on 08/09/2012 4:27:22 PM PDT by EBH
Neither Goldman Sachs Group Inc nor its employees will face U.S. criminal charges related to trades they made during the financial crisis that were highlighted in a 2011 U.S. Senate report, the Justice Department said on Thursday.
The unusual announcement not to prosecute criminally came in an unsigned statement attributed to the department.
Few expected the bank to face criminal charges, but in April 2011, U.S. Senator Carl Levin asked for a criminal investigation
(Excerpt) Read more at reuters.com ...
I'm pretty sure Goldman isn't a rating agency.
Goldman and Paulson had an opinion about the mortgages. Neither is always correct. They created a synthetic security. Showed the potential buyer the pieces that the security derived its value from and said, would you be interested in buying some? They weren't selling to unsophisticated investors, they were selling to other huge entities who could do their own research on the mortgages
They were buying AAA ratings from Moody’s et. al.
The mortgages already existed, Goldman didn’t create them.
Had nothing to do with rating them. Sorry.
Now you’re making sense.
Just stay away from sports-betting analogies.
They didn’t create the mortgages, but they did securitize them.
These are synthetic CDOs. They didn’t securitize the original mortgages. That would make them insiders. Then the claim that they “knew they would fail” might make more sense.
Whatever you say, Jimmy the Greek.
Whatever I can do to help you learn and grow up - - I’m a nice guy that way.
"In other words Paulson combed through the data available on these subprime mortgage deals and picked out the crappiest of the garbage - the most-rotting of the dead fish, all of which allegedly were "AAA" at the time one would presume but which he was quite sure would soon be either downgraded - or default outright - and then asked Goldman to use those as the references against which it would write the swaps that Paulson wanted to buy.
But remember - Goldman didn't buy the bonds to set up the CDO - they just issued a credit-default swap, which, it appears, Paulson's hedge fund bought.
Goldman then went out and solicited people to buy the tranches of the CDOs, selling what was alleged to be a cash-flow stream that Mr. Hedgie had offered (out of the goodness of his heart, no doubt - ed: yes, that's sarcasm) to fund!
Here's the question:
Did Goldman disclose to the potential buyers in the offering circular that John Paulson had come to them with a laundry list of characteristics he wanted in the CDO and offered to fund the credit-default swaps which would only make him money if those reference bonds blew up, and that he would take large, material losses IF THE SECURITIES - AND THE CDO - PERFORMED AND ACTUALLY GENERATED THE CASH FLOWS PROMISED?
It's About Damn Time (Goldman) Posted 2010-04-16
The Audacity Of Synthetics Posted 2010-02-09
See my post #29.
Has it been that long? ;-P