The Abacus pitchbook

By Felix Salmon
April 16, 2010
Here is the Goldman Sachs pitchbook for the Abacus deal in question today. It spends 30 pages talking in great detail about ACA and its qualifications to manage CDOs; it never mentions Paulson. Here's my favorite bit:

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Here is the Goldman Sachs pitchbook for the Abacus deal in question today. It spends 30 pages talking in great detail about ACA and its qualifications to manage CDOs; it never mentions Paulson. Here’s my favorite bit:

philosophy.tiff

Not a lot of indication here that the entirety of the Abacus deal was chosen not by ACA’s professionals at all, but rather by Paulson: the extent of ACA’s involvement was limited to picking which deals they wanted from a master list provided by Paulson. In fact, this bit comes close to being an outright lie:

collateral.tiff

Well yes, “selective basis” is one way of putting it. “Selected by John Paulson” is another.

This definitely makes ACA look bad: their name and logo is on every page of this presentation, and they knew full well that the names in the deal were handpicked by someone never mentioned in the pitchbook. Yet they said nothing about this massive lie of omission. Goldman looks worse, of course — and ACA ended up losing hundreds of millions of dollars on the deal. But there are few players who come out well from this sorry saga.

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