Sunday, April 18, 2010

Why Goldman Sachs execs should be strung up by their nuts

So the SEC is going after Goldman Sachs over this whole derivatives fraud thing, right? You understand what it was that Goldman did wrong, right?
Nah, me either. The Huffington Post breaks it down so that financial illiterates like you and me can understand it.
Basically, Goldman bundled a bunch of risky mortgages (called a Collateralized Debt Obligation) from areas overdue for a housing crash, sold it to some suckers by claiming that all of the mortgages would be paid off in full and took out an insurance policy that would pay out when the CDO inevitably failed far short of maturation.
This transaction is typical of the crap Goldman and others were pulling for the last several years that put our economy in the toilet. These dickheads knew the White House and Congress wouldn't let them go under because they are Too Big to Fail. And the Bush Administration and Congress predictably ponied up hundreds of billions of dollars of our money to save them.