One Comment

  1. In an Aritcle written by David Weidner he quoted Lloyd Blankfein defending GS. Here is what the GS Chief Executive said, “When we sell something as a principal, which is what we are as a market maker, the next minute that item will have gone up, in which case we’ll wish we hadn’t sold it that minute, or it will go down, in which case we’ll actually be glad we did for our own P&L, and sorry for the person who bought it.,” Blankfein said, according to the transcript. “But we are market makers in that. In most of these cases, the person who came to us came to us for the exposure that they wanted to have.”

    This case takes regulation into unchartered waters. Sellers of mortage securities are counterparties and not clients. Only if prosecutors can find fraud, does the government have a case, and that could take years and years and cost millions of dollars. But nowhere near the $10B hit GS has already taken on its market cap.

Leave a Reply

Your email address will not be published. Required fields are marked *