http://bit.ly/7XwAG
The Financial Times in a report confirmed that a Senate investigation panel has revealed that as per transcripts of e mails obtained from Goldman, it is evident that it regularly shorted housing mortgages during the period 2007-2008 to bring down the housing market.
Possibly one day they will be alive to the need of further focussng on the specific transactions at ICE London exchange and NYMEX on the CDS transactions of the SEC case. Namely the 90 odd mortgages that Paulson and Goldman hoodwinked the ACA management to package in the ABACUS 2007- AC1 fund and the investment Banks like IKB and ABN Amro to buy.
In its defence Goldman has said it had invested Dollar 90 million as long position in the fund that it lost, as the ABACUS fund lost value. That ofcourse is the official platform of Goldman's defence , which is again only the outer mask. The truth is that Goldman was nobody's fool. It made billions shorting the 90 mortgages individually in the Abacus fund along with Paulson to bring down each of them.
If the Senate Panel can move into investigating Paulson and Goldman's shorting record for each of these funds individually, it would have earned the SEC the clinching evidence it needs to nail Goldman......the motive behind the event...the profit motivation to short a fund after promoting, underwriting and selling it. It is well known that Goldman has been doing this since several years, under the guise of managing conflicting interests.....but wether it is legally admissable or not is the issue to be decided. The question still remains the same. Should a hedge fund be permitted to short a issue with a synthetic CDO or a CDS, without statuatory approvals, since the public issue which has preceded the same has gone through the process.
No comments:
Post a Comment