By GRETCHEN MORGENSON and LOUISE STORY
Published: December 23, 2009
Goldman and other firms eventually used the C.D.O.’s to place unusually large negative bets that were not mainly for hedging purposes, and investors and industry experts say that put the firms at odds with their own clients’ interests.
“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”
I don't know why people would do business with Goldman Sachs. I don't know why the taxpayer bailed them out via AIG either. Sphere: Related Content
