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Strategies & Market Trends : Fundamental Value Investing
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To: bruwin who wrote (1175)4/29/2010 1:07:53 PM
From: Madharry  Read Replies (2) of 4719
 
I have not seen that. I dont think we can categorize GS as a monolithic mass. Im speculating that if i were trying to place the deal and someone asked me about the quality of it. I would say thats where the rating agency comes in, and leave it at that.
This is pure speculation on my part. However this is all much more complicated than that. This was a synthetic cdo. meaning there were no real underlying mortgages, it was like booking a bet on an outcome and there were two sides and numerous outcomes depending upon which tranche was being purchased. The big loser in the deal was the entity who backtopped the insurer.

I think that what really sticks in my craw is that some people are confusing the role of GS as and advisor with their role as market maker and also suddenly after the fact, the regulators field that they have some responsibility to divulge who the sellers and buyers are to each other. That such seems to me to be like changing rules after the fact and like Blankfein Im not sure if one can be a market maker under those rules because there is no way of altering ones risk profile meaning if as a market maker i suddenly have to disclose that Im trying to sell something it may become much more expensive for me to sell it and likewise with buying it. This will probably push up transactions costs dramatically.
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