Goddam Sachs

Sorry for the blasphemy. It is just that Lloyd Blankfein and his little party of Geckos really know how to screw the pooch.

To start with, they refused any contrition (probably on advice of counsel) in front of the Senate yesterday. "Yup, we sold those securities." "Nope, we are not sorry about it." Goldman pointed out that lots of firms sell lousy paper all day long. People sell lousy cars, too. But what Goldman failed to point out is that they also created that lousy paper. Sure firms bring companies to market in IPOs that stink ... but that is disclosed in offering circulars and analysts have a fair shot of describing that to the public.

With Goldman's securities, they designed them to fail. Surely, that is almost unique.  It is not good enough to say that our trading desks were doing their business, and we originators were doing ours. With the demise of all corporate separation (Glass Steagal) etc., you are one firm, with one bottom line.  In this instance, you knew that the AAA rating was phony ... but you did not put a "wrapper" on the book stating that potential buyers ought ti have a look at the rating. There is no "management believes" as you would see in an offering circular. Goldman sold shit, knowing it was shit, calling "shit" in internal memos with the full knowledge that the outside world thought it was at least "good shit" if not AAA as it was catagorized.  In that, the case is made for fraud.

I mean, they let Paulson & Co. help pick the securities to be included in the CDOs, knowing for certainty that Paulson intended to short it. It does not get clearer.

You have reasonable reliance, knowing misrepresentation, intent to deceive, motive and profit.