Thursday, December 24th, 2009   7:44 am | Author: Jerry | Economy, Money | Add Comment
Tags: CDO, Deutsche Bank, Godlman, Morgan Stanley
The NYT published an article about Goldman Sachs and their creation of complex mortgage related securities and selling them to their top clients.
Other financial institutions including Morgan Stanley and Deutsche Bank also created similar securities.
The problem is that these institutions created these securities so that they could bet against them in case the mortgage market imploded. Basically they sold short.
Goldman clients including “Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments.”
Meanwhile Goldman raked in the profits first on the fees they collected on selling these securities to their clients and then on their bets that these securities would tank, which they did.
“How these disastrously performing securities were devised is now the subject of scrutiny by investigators in Congress, at the Securities and Exchange Commission and at the Financial Industry Regulatory Authority.”
“..authorities appear to be looking at whether securities laws or rules of fair dealing were ..continue reading