Also, if you have moderation, why is it I report 2 to 3 spam messages for dating sites daily.

You are indeed correct to say that Goldman often acts as the middleman, or broker, in transactions where one party takes the opposite position to another. However, a CDO doesn’t quite work that way: the investors who buy into the upper tranches take a reduced return in the knowledge that they’ve offloaded the risks onto a class of speculators will take a higher return on the ‘equity’ tranche.

This risk transfer is a graded redistribution of common risks and common profits, not a trade of diametrically-opposed interests managed by an independent broker.

It’s accepted that outsiders will take short positions – bets, if you will – against some or all of the investments involved: but every time I but a share, I know that someone sold it, and that someone else is probably ‘shorting ‘ it right now.

Outsiders, fine. But insiders? Would I buy into a company if I knew the directors were taking bets on the price going down? Would I buy into a mutual fund, if I knew that the stocks were picked by someone who was actively shorting the very same constituents?

Would I have bought a tranche of a Goldman Sachs CDO, knowing that the constituents were selected by someone with an interest in seeing their value fall – or even in seeing the whole structure go down?

It’s not the same as knowing your broker found a seller for the share I bought, or a buyer for the CDS I sold, who will lose money on it if I gain and vice versa. That situation’s about brokering a deal between counterparties; this one’s about dealings with investors.

Goldman stand accused of failing to disclose that material decisions in the structure of an investment were made by a party who stood to gain from investors’ losses. That’s the SEC’s case: it may be difficult to prove, and sure as hell the investors have an interest in handing back their losses to Goldman – but the SEC believe they have enough to get it to court and that means there’s good documented evidence.

God forbid that they have hard evidence of Goldman representing Paulson as being ‘onside’, or as a coinvestor, when the opposite turns out to have been the case. Would you like to rule that out? Today’s testimony in the hearings was, shall we say, lacking in an unambiguous denial of that awful possibility; and I would’ve expected to hear something – anything – intended to lay such a suspicion conclusively to rest.

That rule states that seller of securities may not make material misrepresentations when pitching their products; i.e., Stocks cannot be sold like used cars.

The SEC complaint alleges that GS told potential buyers that a Paulson & Co., a major hedge fund, was long $200 million dollars worth of this product, when they were in fact short that much (if not more).

Its hard to see how that is not a 10-b5 violation…

There is more here:
http://www.ritholtz.com/blog/2010/04/10- things-you-dont-know-gs-case/

If Paulson’s firm was at times represented by those 2 monikers, was he also represented as Paulson, the firm going short? All three were one and the same, so I am sorry but I call that misleading.

Also, which of the 3 monikers was used by Paulson’s firm were used to say they were going short. Pellegrini’s testimony says he represented Paulson, but was this in writing or to a few people over a beer. Did Goldman misrepresent these 3 parties as separate entities? Paulson is the one to come to Goldman’s and rejected ACA’s additions the profile. So to that end, ACA seems to NOT have final say.

Was there misconduct on behalf of Goldman to parties/rating companies to give the AAA ratings for what they themselves knew to be highly volatile sub- prime mortgage packages? Were they not being traded this way because they were NOT an AAA product, and so could not be sold and traded in the ‘normal’ fashion? The ones which were left in the portfolio were picked as they were on the brink of being defaulted on. Is that not misleading? How can a stacked deck not be considered materially misleading?

Referring to the firms as ‘seasoned professionals’ has little to do with the case, as in the long run that is not what this case is about. Using that as a defense is pure deflection. The mafia can still be charged even if it dupes rubes who are seasoned professionals, correct?

Regardless of the outcome, it can’t be seen as anything but a toxic, contrived mess,no matter how ‘professional’ the unethical dealings were.

If Paulson’s firm was at times represented by those 2 monikers, was he also represented as Paulson, the firm going short? All three were one and the same, so I am sorry but I call that misleading.

Was there coercion/kickbacks on behalf of Goldman to parties/rating companies to give the AAA ratings for what they themselves knew to be highly volatile sub- prime mortgage packages? Were they not being traded this way because they were NOT an AAA product, and so could not be sold and traded in the ‘normal’ fashion? The ones which were left in the portfolio were picked as they were on the brink of being defaulted on. Is that not misleading? How can a stacked deck not be considered materially misleading?

Also, which of the 3 monikers was used by Paulson’s firm were used to say they were going short. Pellegrini’s testimony says he represented Paulson, but was this in writing or to a few people over a beer. Did Goldman misrepresent these 3 parties as separate entities? Paulson is the one to come to Goldman’s and rejected ACA’s additions the profile. So to that end, ACA did NOT have final say.

The presentation of the firms as ‘seasoned professionals’ has little to do with the case, as in the long run that is not what this case is about. Using that as a defense is pure deflection. The mafia can still be charged even if it dupes rubes who are seasoned professionals, correct?

I ask these questions without the knowledge of a lawyer, but with enough knowledge to know that THIS is similar to what a lawyer DOES need to know to make a case.
Although there are cute words being bandied about, the ordinary folk like myself use words more akin to bookie, swindlers, rubes, etc.

Regardless of the outcome of this case, it can’t be seen as anything but a toxic, contrived mess, no matter how ‘professional’ the unethical dealings were.

If Paulson’s firm was at times represented by those 2 monikers, was he also represented as Paulson, the firm going short? All three were one and the same, so I am sorry but I call that misleading.

Was there coercion/kickbacks on behalf of Goldman to parties/rating companies to give the AAA ratings for what they themselves knew to be highly volatile sub- prime mortgage packages? Were they not being traded this way because they were NOT an AAA product, and so could not be sold and traded in the ‘normal’ fashion? The ones which were left in the portfolio were picked as they were on the brink of being defaulted on. Is that not misleading? How can a stacked deck not be considered materially misleading?

Also, which of the 3 monikers was used by Paulson’s firm were used to say they were going short. Pellegrini’s testimony says he represented Paulson, but was this in writing or to a few people over a beer. Did Goldman misrepresent these 3 parties as separate entities?

The fact that Paulson has no Wells Notice as of yet, doesn’t mean there isn’t one forthcoming and he wasn’t complicit in these dealings. His 6 page letter to his shareholders repeats it was an arm’s length transaction, but was it? He is the one to come to Goldman’s and rejected ACA’s additions the profile. So to that end, ACA did NOT have final say.

The presentation of the firms as ‘seasoned professionals’ has little to do with the case, as in the long run that is not what this case is about. Using that as a defense is pure deflection. The mafia can still be charged even if it dupes rubes who are seasoned professionals, correct?

I ask these questions without the knowledge of a lawyer, but with enough knowledge to know that THIS is similar to what a lawyer DOES need to know to make a case.
Although there are cute words being bandied about, the ordinary folk like myself use words more akin to bookie, swindling, rubes, etc.

Regardless of the outcome of this case and others, they can’t be seen as anything but a toxic, contrived mess, no matter how ‘professional’ the unethical dealings were. Nice try though.

Talking about the ‘highly complex product’ and instruments that make up the whole package and breaking it down as you did will be the Goldman’s Layers position, certainly. But it is all deflection from the simple truths which are all that must be proven, after all. Misleading clients and knowingly misrepresenting the product or Paulson, which it seems they did.

Do you have privy to the 8 million pages of documentation and the emails and perhaps even witness statements at this time? Are you aware of who they are calling for witnesses and what information they may have? have they subpoenaed the ex-employee who left shortly after the deal was made? What was her involvement and why is she no longer in the business? Do they have some industry insiders as witnesses? I have seen the How do you know their position is weak then?

Are you saying that to save his skin, perhaps the VP will not squeal, even though he will for certain be thrown to the lions? (too bad this is not a criminal suit … but, maybe there are criminal charges, such as insider trading or kickbacks, which will be lessened if he talks. Isn’t that a deal lawyers can make?)

Talking about the highly complex product *cough* and instruments that make up the whole package and breaking it down as you did will be the Goldman’s Layers position, certainly. But it is all deflection from the simple truths which are all that must be proven, after all. Misleading clients and knowingly misrepresenting the product or Paulson, which it seems they did.

Do you have privy to the 8 million pages of documentation and the emails and perhaps even witness statements at this time? Are you aware of who they are calling for witnesses and what information they may have? have they subpoenaed the ex-employee who left shortly after the deal was made? What was her involvement and why is she no longer in the business? Do they have some industry insiders as witnesses? How do you know their position is weak then?

Are you saying that to save his skin, perhaps the VP will not squeal/break, even though he will for certain be thrown to the lions? (too bad this is not a criminal suit … but, maybe there are criminal charges, such as insider trading or kickbacks, which will be lessened if he talks. Isn’t that a deal lawyers can make?)

I would say the 2 charges go hand in hand, although you present them separately and try to weaken each by diffusing with explanations of the ‘highly complex product,’ which it is often labeled. Was the material misleading because Paulson was the one who provided the list to be selected from, yet was called something other then the firm name? Such as, an ‘independent third party?’ They were also named the ‘transaction sponsor’.

If Paulson’s firm was at times represented by those 2 monikers, was he also represented as Paulson, the firm going short? All three were one and the same, so I am sorry but I see that as misleading, and materially misleading.

Was there coercion/kickbacks on behalf of Goldman to parties/rating companies to give the AAA ratings for what they themselves knew to be highly volatile sub- prime mortgage packages? Were they not being traded this way because they were NOT AAA product, and so could not be sold and traded in the ‘normal’ fashion? The ones which were left in the portfolio were picked as they were on the brink of being defaulted on. Is that not misleading? How can a stacked deck not be considered materially misleading by those who stacked the deck? being Goldman knew who was stacking the deck he was materially responsible to tell.

Also, which of the 3 monikers was used by Paulson’s firm were used to say they were going short. Pellegrini’s testimony says he represented Paulson, but was this in writing or to a few people over a beer. Did Goldman misrepresent these 3 parties as separate entities?

The fact that Paulson has no Wells Notice as of yet, doesn’t mean there isn’t one forthcoming and he wasn’t complicit in these dealings. His 6 page letter to his shareholders repeats it was an arm’s length transaction, but was it? He is the one to come to Goldman’s and eventually rejected ACA’s additions the profile. So to that end, ACA did NOT have final say.

The presentation of the firms as ‘seasoned professionals’ has little to do with the case, as in the long run that is not what this case is about. Using that as a defense is pure deflection. The mafia can still be charged even if it dupes rubes who are seasoned professionals, correct?

I ask these questions without the knowledge of a lawyer, but with enough knowledge to know that THIS is similar to what a lawyer DOES need to know to make a case.
Although there are cute words being bandied about, the ordinary folk like myself use words more akin to bookie, swindling, rubes, etc.

Regardless of the outcome of this case and others, they can’t be seen as anything but a toxic, contrived mess, no matter how ‘professional’ the unscrupulous dealings were. Nice try though.