Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty
 

The Goldman Sachs Lie

June 11, 2010 by  

*Goldman Sachs lied to its customers. The best summary I’ve seen about what Goldman Sachs did wrong comes from my friend Eric Fry. Here’s what he said in the Daily Reckoning, one of my favorite ezines:

“As one of America’s largest purveyors of toxic collateralized debt obligations (CDOs), Goldman played the role of financial cigarette salesman. Nothing wrong with that… so far. But this particular cigarette salesman took out insurance policies on its biggest customers. Okay, so maybe that’s a bit morally ambiguous, but it is still perfectly legal… as long as the cigarette salesman didn’t lie to his customers about the potential consequences of smoking cigarettes.

“But Goldman did lie. To continue our metaphor, Goldman not only ‘whited out’ the Surgeon General’s warning on every pack it sold, it also substituted its own warning that read something like: ‘These cigarettes are full of sugar and spice and everything nice, just like little girls.’

“Goldman informed its clients that John Paulson—the guy who secretly helped construct the Abacus CDO that is at the heart of the SEC’s complaint—was a large buyer of this security, when in fact he was a large short-seller of the security. That was a lie. Importantly therefore, Paulson did not utilize his legendary expertise of the CDO market to select the securities that would succeed, he used his expertise to select the securities that would fail.

“Goldman’s failure to disclose this very material fact was a fraud… big time. If Goldman had merely informed its customers that the "cigarettes" it sold were full of ‘frogs and snails and puppy dog tails’ and/or that the guy who helped select the securities comprising this particular CBO was selling it short, Goldman could have purchased life insurance on its customers all day long in full compliance with every applicable securities law.”

—Chip Wood

Chip Wood

is the geopolitical editor of PersonalLiberty.com. He is the founder of Soundview Publications, in Atlanta, where he was also the host of an award-winning radio talk show for many years. He was the publisher of several bestselling books, including Crisis Investing by Doug Casey, None Dare Call It Conspiracy by Gary Allen and Larry Abraham and The War on Gold by Anthony Sutton. Chip is well known on the investment conference circuit where he has served as Master of Ceremonies for FreedomFest, The New Orleans Investment Conference, Sovereign Society, and The Atlanta Investment Conference.

Facebook Conversations

Join the Discussion:
View Comments to “The Goldman Sachs Lie”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at newstips@personalliberty.com

  • Nick

    Where’s the surprise?

    Whether it’s scumbags like Goldman or scumbags in a different “industry”, greed rules and all of that warm-and-fuzzy rhetoric is just to keep the sheeple distracted.

    They knew what they were doing and so did a lot of “regulators” and people in Congress, but the bribes that they call PAC contributions made sure that nothing was done or said.

    Whatever Goldman winds up paying will be chicken-feed compared to what they stole so it means nothing to them. To the public it’s a matter of “Let them eat cake.”

Bottom
close[X]

Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to PersonalLiberty.com,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.