Goldman Sachs makes the case for financial reform
They're greedy. They're unethical. They're clever in a borderline nefarious way.
No one should be surprised that the much envied and equally loathed Wall Street investment bank Goldman Sachs may have sold clients securities that an internal Goldman e-mail described using a word that rhymes with itty-bitty.
There was nothing tiny, though, about the consequences of Goldman's sale of a collateralized debt obligation, known by the appropriately inscrutable title, Abacus 2007-AC1.
According to the Securities and Exchange Commission, a hedge fund with which Goldman collaborated put together a portfolio of high-risk mortgages, then pocketed $1 billion after it shorted the ill-fated CDO that Goldman subsequently placed with a German bank and a New York-based money manager.
That Goldman may have operated in a duplicitous (if not criminal) manner appears not to have dissuaded other investors from seeking the firm's advice and services, at least not yet. Goldman turned a $3.5 billion profit in the first quarter doing what its CEO, Lloyd Blankfein, once called "God's work."
Presumably, such work would not include helping the Greek government obfuscate its deplorable fiscal position through derivatives and then selling Greek government bonds to clients, as Goldman also is alleged to have done.
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