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Re: SEC sues Goldman Sachs for fraud [Re: zappaisgod]
#12504149 - 05/04/10 10:53 AM (13 years, 9 months ago) |
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You should've bolded these two lines and made them bigger, Zappa. I think they are very important here:
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“I don’t care if John Paulson is shorting these bonds. I’m going to have no worries that he has superior knowledge,” he said, adding: “It’s our job to assess the credit.” The assets are the assets. The math either works or it doesn’t.
Ding.
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IKB, one of the buyers, and ACA, which acted as the selection agent and insured the transaction, said they didn’t know Mr. Paulson was on the other side of the deal and had influenced which mortgages were chosen. Together, IKB and ACA lost nearly $1 billion in the deal.
Again, why aren't IKB or ACA filing any lawsuits?
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Yrat
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Quote:
ArmFromTheAbyss said:
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zappaisgod said: Actually it was a stupid analogy, especially considering the buyers were professional mechanics who took the car apart before they bought it.
The argument that the buyers were pro's is a joke, it has nothing to do with the allegation that Goldman failed to disclose material info.
can you clarify? i can not figure out your argument from what seems to be a contradiction.
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Re: SEC sues Goldman Sachs for fraud [Re: Yrat]
#12505874 - 05/04/10 03:43 PM (13 years, 9 months ago) |
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He's saying "whether or not the buyers of the asset were pro's at analyzing it or not is completely irrelevant. the fact of importance here is that goldman failed to disclose material info - namely, that Paulson assembled it (i think?)."
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ArmFromTheAbyss
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Re: SEC sues Goldman Sachs for fraud [Re: memes]
#12506000 - 05/04/10 04:10 PM (13 years, 9 months ago) |
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Yeah that's it.
This is key to understanding what really happened:
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How do sellers scam on CDOs? By taking a few of the ones they are peddling, a subset, and stuffing them with more toxic assets than the other ones.
Now, because there are only some CDOs which are rigged, finding which subset of them is, in a sea of CDOs....computationally impossible. It wouldn't matter if you had gobs and gobs of super computers, and billions of years, you ain't gonna find them because one has to go through all sorts of permutations to calculate and determine them.
It's impossible to detect the toxic waste unless you put it there yourself. Which is why Paulson knew they were junk and it wasn't luck that his bet payed off.
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Well if it's impossible to detect toxic waste, then the risk associated with the possibility of it's existance within the asset package would have been calculated and included inherently within the price.
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zappaisgod
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Re: SEC sues Goldman Sachs for fraud [Re: memes]
#12506433 - 05/04/10 05:36 PM (13 years, 9 months ago) |
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It will never get through to these guys that the assets were 100% available to the buyers' examination. If they wanted to know Paulson's opinion, and he was only one of several people working on the package, they should have fucking hired him. You know what makes a deal? Differences of opinion. They had theirs, Paulson had his. I'm sure quite a few other people working on it thought it was a shit deal. I bet quite a few people at IBK and ACA also thought the deal was shit.
This will never end. Some people will never grow up and never accept the fact that there are winners and losers in every fucking deal. I wonder why.
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Re: SEC sues Goldman Sachs for fraud [Re: zappaisgod]
#12509125 - 05/05/10 05:38 AM (13 years, 9 months ago) |
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zappaisgod said: Some people will never grow up and never accept the fact that there are winners and losers in every fucking deal.
I'd argue both parties are winners in every single transaction that is willingly and knowingly carried out by a set of individuals/entities.
Whether or not they stay a 'winner' is an entirely different story
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Yrat
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Re: SEC sues Goldman Sachs for fraud [Re: memes]
#12511553 - 05/05/10 04:07 PM (13 years, 9 months ago) |
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i agree. why would one agree to a transaction if they knew they would lose out?
transactions occur when both parties feel they will gain from the exchange. there is mutual benefit. this is the foundation of any economic system.
guy A trades a chicken to guy B for a sack of wheat. guy A would rather have wheat than a chicken, and guy B would rather have a chicken than wheat. both have gained from the exchange.
now the question is, what if guy A knew that his chicken was ill, and would be dead in 2 days, but trades it anyways without letting guy B in on the info. did he defraud B?
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ArmFromTheAbyss
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Re: SEC sues Goldman Sachs for fraud [Re: Yrat]
#12512117 - 05/05/10 05:54 PM (13 years, 9 months ago) |
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It would be like selling a warehouse full of chickens, and tossing in a few Ebola infected ones...then buying insurance on it.
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ArmFromTheAbyss
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Re: SEC sues Goldman Sachs for fraud [Re: memes]
#12512144 - 05/05/10 05:58 PM (13 years, 9 months ago) |
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Quote:
meams said: Well if it's impossible to detect toxic waste, then the risk associated with the possibility of it's existance within the asset package would have been calculated and included inherently within the price.
Cue incompetent/complicit ratings agencies.
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zappaisgod
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Quote:
ArmFromTheAbyss said: It would be like selling a warehouse full of chickens, and tossing in a few Ebola infected ones...then buying insurance on it. 
Only if the warehouse was bought by a group of veterinarians who checked every chicken. Really, you fail at analogies.
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zappaisgod
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Quote:
ArmFromTheAbyss said:
Quote:
meams said: Well if it's impossible to detect toxic waste, then the risk associated with the possibility of it's existance within the asset package would have been calculated and included inherently within the price.
Cue incompetent/complicit ratings agencies.
You have made a rightful point about rating agencies' failures. But they are irrelevant in this case.
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Re: SEC sues Goldman Sachs for fraud [Re: zappaisgod]
#12515503 - 05/06/10 07:59 AM (13 years, 9 months ago) |
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Quote:
zappaisgod said: Really, you fail at analogies.
Oh, why narrow the scope of this comment so much?
Why not just leave it at:
Quote:
you fail
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Yrat
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Re: SEC sues Goldman Sachs for fraud [Re: zappaisgod]
#12515597 - 05/06/10 08:34 AM (13 years, 9 months ago) |
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Quote:
zappaisgod said:
Quote:
ArmFromTheAbyss said: It would be like selling a warehouse full of chickens, and tossing in a few Ebola infected ones...then buying insurance on it. 
Only if the warehouse was bought by a group of veterinarians who checked every chicken. Really, you fail at analogies.
what if you bought the warehouse after getting it inspected by veterinarians who gave it a AAA rating, but only because they were getting a kickback from the seller for doing so?
i wonder how the ratings agencies will (fail to) come into play in all of this.
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Re: SEC sues Goldman Sachs for fraud [Re: Yrat]
#12515909 - 05/06/10 10:21 AM (13 years, 9 months ago) |
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Nowhere. The buyers were professional agencies who did their own ratings.
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Re: SEC sues Goldman Sachs for fraud [Re: zappaisgod]
#12516038 - 05/06/10 10:52 AM (13 years, 9 months ago) |
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Yeah, I was trying to figure out why the rating mattered if the buyer picked the thing apart themselves
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Re: SEC sues Goldman Sachs for fraud [Re: memes]
#12516787 - 05/06/10 01:14 PM (13 years, 9 months ago) |
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It doesn't in this case but they are in for some serious examination. That's what happens when you set up a system that installs a trusted guardian. The guardian always fails to be perfect and everybody suffers. That is why it is always imperative do your own due diligence. Get lazy or stupid, get fucked. As it should be.
Which is not to imply that all gambles must or should be winners. No risk, no reward. Anybody who thinks there is a sure thing anywhere in the real world is a fool.
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Re: SEC sues Goldman Sachs for fraud [Re: zappaisgod]
#12516986 - 05/06/10 01:57 PM (13 years, 9 months ago) |
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Quote:
zappaisgod said: Anybody who thinks there is a sure thing anywhere in the real world is a fool.
Death. Taxes.
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zappaisgod
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Re: SEC sues Goldman Sachs for fraud [Re: memes]
#12517886 - 05/06/10 04:36 PM (13 years, 9 months ago) |
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Oh yeah?
Taxes; See illegal aliens. Yeah, they prop up social security. Uh huh.
Death; See Keith Richards. As long as he lives Death's inevitability is in question.
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