How Goldman Sachs Swindled Its Own Customers
April 19th, 2010
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Goldman sold fire insurance to its customers on a house it had designed to burn.
Buying some collaterised debt obligations is like betting that your neighbor’s house will burn down. Wall Street was selling exotic bets. “Get rich off your neighbor’s impending misery.” The reputation of the Street reached a new low last week when it was revealed that Goldman Sachs was working with an arsonist to design your neighbor’s house so that it was almost certain to burn down. Then, Goldman Sachs turned around and sold the fire insurance on the house to its own customers.