My God, you are an idiot.

[Tyrone Slothrop]

Originally Posted by Hank Chinaski

that's your old?

No, but I'd rather look at it than yours, which looks like it was extruded by someone who ate lots of grains. YMMV. NTTAWWT.

[Adder]

It's hard to tell what led up to this, but this sure looks like an officer of the NYPD punching a non-violent woman in the head. Or I guess it's actually a guy.

Still, they seem to be trying to make themselves look bad. In front of a whole bunch of cameras.

[Tyrone Slothrop]

Originally Posted by Adder

It's hard to tell what led up to this, but this sure looks like an officer of the NYPD punching a non-violent woman in the head. Or I guess it's actually a guy.

Still, they seem to be trying to make themselves look bad. In front of a whole bunch of cameras.

The account I read had the guy saying he gave the officer a look.

[Sidd Finch]

Originally Posted by Adder

It's hard to tell what led up to this, but this sure looks like an officer of the NYPD punching a non-violent woman in the head. Or I guess it's actually a guy.

Still, they seem to be trying to make themselves look bad. In front of a whole bunch of cameras.

Oh, boy. I wonder how Atticus feels about this one.

[Adder]

Originally Posted by Tyrone Slothrop

The account I read had the guy saying he gave the officer a look.

Well, heck, totally worth running him down, grabbing him and punching him in the face then. Clearly there was no choice.

[Tyrone Slothrop]

This.

eta And this:

[Gattigap]

[Adder]

Originally Posted by Tyrone Slothrop

This.

eta And this:

Because you "know" which loans are bad and your "client," despite being a massive financial institution itself did not "know."

[Fugee]

Originally Posted by Adder

Because you "know" which loans are bad and your "client," despite being a massive financial institution itself did not "know."

The client buying the securities doesn't usually have visibility to the details of the individual mortgages in the pool. The person making the pool of mortgages backing the securities almost certainly would.

[Tyrone Slothrop]

Originally Posted by Adder

Because you "know" which loans are bad and your "client," despite being a massive financial institution itself did not "know."

Click on the link I embedded in the photo and you will see what is being referenced.

[Fugee]

Originally Posted by Tyrone Slothrop

Click on the link I embedded in the photo and you will see what is being referenced.

And here's the story about the case behind the sign. No matter how sophisticated the investor is, it's bad if you don't disclose that a hedge fund involved in selecting the mortgages back the securities has taken a short position on those securities.

[Adder]

Originally Posted by Fugee

The client buying the securities doesn't usually have visibility to the details of the individual mortgages in the pool.

For these products, that isn't necessarily true. And for the specific product involving Paulson that was the source of the SEC's action against Goldman, this was explicitly not true. The SEC's allegation was that despite that entire pool was disclosed, Goldman violated the law by not saying Paulson was involved.

[Adder]

Originally Posted by Tyrone Slothrop

Click on the link I embedded in the photo and you will see what is being referenced.

Gee, thanks. I had no idea.

[Adder]

Originally Posted by Fugee

And here's the story about the case behind the sign. No matter how sophisticated the investor is, it's bad if you don't disclose that a hedge fund involved in selecting the mortgages back the securities has taken a short position on those securities.

Ah, but your paraphrase is wrong. This was a synethetic CDO. The primary "asset" in the "collateral" (a misuse of that term that is common parlance in this area) was a hedge fund with a CDS contract that was a massive bet and/or insurance against the mortgages. That was implicit in the structure of the product.

So what the SEC said was fraud was 1. not saying his name was John Paulson, and 2. that he played a role in selecting the mortgages (which he and Goldman denied).

In hindsight, because Paulson was right, that looks like relevant information. Maybe even material in hindsight.

But do you think it was material or even relevant at the time? Do you think an investor, who could look at each underlying asset in the structure, having been told, by the way, this hedge fund guy named John Paulson is taking the short side on the included CDS and was involved in putting together the reference pool, would have shied away?

The answer is clearly no way. They would not have cared. They believed the housing bubble wasn't over, and they believed the bonds' credit rating.

Had Paulson been wrong about the timing, no one would be saying that Goldman "knew" that the mortgages were bad.

So, yeah, that's the point. Goldman only "knew" (or really cared) that the mortgages were bad with hindsight.

[sebastian_dangerfield]

Originally Posted by Adder

For these products, that isn't necessarily true. And for the specific product involving Paulson that was the source of the SEC's action against Goldman, this was explicitly not true. The SEC's allegation was that despite that entire pool was disclosed, Goldman violated the law by not saying Paulson was involved.

And, I believe, it was the incompetents at IKB who bought most of that junk. Incompetents whom it was suggested at the time were buying US mortgage debt near blindly. And who have recently admitted to Michael Lewis such allegations were absolutely accurate.

Idiocy is no defense to fraud. But there should be some level of disgust aimed at both sides of this deal: Goldman and Paulson for scumbaggery, IKB for unconscionable negligence.