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Friday, April 16, 2010

Goldman's Abacus




Notice the fine print. "24 different servicers represented, with the largest (Wells Fargo) representing 29% of the Reference Portfolio.

Notice the extra, extra, fine print (1) As of February 26, 2007.

The complaint by the SEC against Goldman.:

“One thing that we need to make sure ACA understands is that we want their name on this transaction. This is a transaction for which they are acting as portfolio selection agent, this will be important that we can use ACA’s branding to help distribute the bonds.”

and

“Looks good to me. Did [Paulson] give a reason why they kicked out all the Wells [Fargo] deals?”

Now check out the 178 page offering memorandum of April 26. What happened to the Wells Fargo deals, that were advertised in Goldman's flip sheet?

And how did Paulson do? Since in just a few months, the securities were toast? 
I'll give you a picture, so you won't forget. Because Goldman and Paulson & Co. would have you to believe, that they didn't deceive investors, or lie, or cheat, or misrepresent?

Goldman and Paulson, stole from big banks in Europe, and they stole from the pensions of firemen and policeman. and teachers and laborers. Goldman, and Paulson & Co., were equal opportunity thieves, stealing from the sophisticated, and stealing from the common folk. The only difference between the two, was that Goldman thought theft, was doing the work of God!

Now two days ago, the banks said they weren't ready to do any homeowner modifications. Goldman is hoping to pay a fine of $100 million, and walk away; meanwhile the stock lost $10 billion in market cap.

How does 100X leverage feel now?

I'm sorry, but I just don't think that the SEC is so dumb, and that Goldman's pimp, Jim Cramer, is so right this time. I'll bet with the SEC.  Goldman f*cked IKB, but they wrapped it up in legalese.

Take Goldman before a jury, and the wrapping comes off.

Goldman wouldn't stand a chance in hell.

Even if they were doing "God's work."


And the Fabulous Fabrice who helped concoct this sham?

Who boasted he would be the only standing?

He said this:

"More and more leverage in the system. The whole building is about to collapse anytime now ... Only potential survivor, the fabulous Fab[rice Tourre] ... standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implication of those monstruosities [sic]!!!”

Now he's at a loss for words!



But while we are talking Abacus, remember this one?

Nov. 12 (Bloomberg) -- Goldman Sachs Group Inc. paid off at face value some junior-ranking slices of two collateralized debt obligations at the potential expense of more-senior classes that now are likely to default, according to Fitch Ratings.


Goldman Sachs, the most-profitable securities firm, applied its “sole discretion” to ignore standard payment priority and use cash in reserve accounts for the Abacus 2006-13 and Abacus 2006-17 CDOs to retire lower-ranked notes, Fitch said yesterday in separate statements.
 
Before Goldman perfected high frequency  trading to screw their clients, their algorithm was an abacus.
 
Today they got busted.
 
And this time, it may not be an "Oh My" moment.
 
Because Paulson and Co., who wasn't charged, was one of the experts at shorting stocks without a locate. They made it on the way down, and then, they made it on the way up.
 
And speaking of stocks without locates, when is this story on Phil Falcone going to get some legs?
 
Remember how he made $2.5 billion shorting Wachovia stock? Back in late 2008?
 
  [wachoviashortsure.jpg]
 
 Without a locate?
 
 The NY Post  had this to say on October 5, last year:

While most traders who make their living betting financial sector stocks will decline have been forced to the sidelines in recent weeks because of the Securities and Exchange Commission ban on shorting, one trader who foresaw weakness in Wachovia in the spring has managed to book a $2.5 billion profit on a single trade on the ailing bank, The Post has learned.


Philip Falcone, of New York-based Harbinger Capital, rang up the incredible profit by shorting a whopping 117 million Wachovia shares at $30 back in May after his top analyst and investment chief pointed out problems with the Charlotte, N.C.-based bank's mega-billion dollar Option ARM loan portfolio.

The entire short interest in Wachovia, at the end of April in 2008 was 117.4 million shares.

Did Falcone have the entire short?

But wait--he put his short on in May. When the short interest only moved up a couple million shares?

Where was that legal short?

Of 117 million shares? Why didn't it show up on the short interest tables?

Shorts that helped drive Wachovia down?

Oh, that's right. I forgot. He did his shorting through Lehman Brothers. They didn't need a locate!

But we still have Lehman's records.Why doesn't someone check  his locate?

Paulson & Co. also participated heavily in the raid of Wachovia. Does anybody think that his $3.7 billion dollar payday, came just from Goldman's abacus?

Why didn't his shorts show up? He rode Wachovia down in th eraid, and then, gobbled up the shares.  At the end of 2008, Paulson's position in Wachovia made up almost 8% of his fund!

But why was it that only Paulson's buys of Wachovia show?

And where was Philip Falcone's shorts? Why didn't they show? Just like Paulson's?

Oh that's right. I forgot. They're billionaires. They get to play by different rules!



But how much money has Paulson's investors made? $25 nillion? Does anybody think that panics or bank runs only happen in Greece? Could some bolt from Pailson, at the hint of impropriety?

Don't you think, that they know, with a nod and a wink, of Paulson's antics? Why else did gold get hit today? Who owns gold? Isn't Paulson the biggest owner of gold and gold stocks on the street?

Maybe you'll say that it wasn't Paulson selling. Oh. What was it then? Traders front running the selling they thought he would do?

Like Paulson & Co. and Mr. Falcone did to Wachovia!

But does anybody really think, that the SEC is that stupid, that they haven't figured out how Wall Street gamed the system for their own benefit?

And wiped out the middle class while they were at it?

And then bonused themselves for doing it?

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