Goldman Sachs Shorted Greek Debt After It Arranged Those Shady Swaps

[WhiskeyGirl]

Goldman Sachs Shorted Greek Debt After It Arranged Those Shady Swaps

Despite its role in creating swaps that may have allowed the Greek government to mask its growing debts, Goldman has no net exposure to a default on Greek debt, a person familiar with the matter says.

Goldman is “flat” when it comes to Greece, the person says. Which is to say, its long and short exposure to a potential Greek default are in balance.

In light of this combination of arranging structured financing while shorting the customer's debt, Goldman may find itself in a familiarly uncomfortable public light. Goldman has come under a barrage of criticism for structuring mortgage-backed securities while its traders shorted that market. As a result of those short trades, Goldman lost far less money than its rivals when the U.S. housing market imploded.

Something similar is at work here and the criticism will likely follow along the same track. Goldman was uniquely well-positioned to understand that Greek debt service obligations were higher than they would have appeared just by looking at its official debt levels, making Greece a riskier credit. This knowledge may have allowed Goldman to acquire credit protection on the trades on the cheap.

To our eyes, this entire line of criticism is off-base. Take mortgages. While some media accounts claim that Goldman made billions by shorting the housing market, the truth is that Goldman actually lost money during the worst of the mortgage meltdown. The billions it made on short trades were out-weighed by the billions lost on the long trades.

Why did the US government use taxpayer money to bailout Goldman and the others?  Where is the upside for Main Street?

Why did the US government use taxpayer money to bailout AIG?  Where is the upside for Main Street? 

Free houses?  Everyone's mortgage paid off?  Maybe those bankruptcy notices in the paper are fake? 

Why does it seem Main Street continues to struggle so that Fat Cat derivatives and financial manipulations make MORE money? 

Where is the upside for Main Street?

I watch on TV all these commercials for lawsuits against companies that didn't watch out for their owners best interests.

Didn't anyone notice that all those packaged subprime mortgages were going sour?  How did Goldman and others present this risk?  Did they offer any creditable financial information?  Maybe they implied it was safe because taxpayers would bail them out?

Would anyone on Main Street have sold a house/mortgage to a homeless person without the ability to pay?  Would anyone have sold a house/mortgage to someone who lied on their application?  Didn't show ID?  Didn't provide reasonable verification of who they are, their employment history, or their credit history?

For some reason, Main Street is punished for bad credit history, even if it's littered with identity theft, fraud, and abuse.  It's up to Main Street to fix it.

Credit rating agencies - how many packaged all this catastrophic toxic risk?  Any of those folks go to jail?

Why isn't Congress, the White House, and other regulatory agencies holding these folks accountable for all their bad deals?

Why aren't these folks accountable to Main Street?  Taxpayers?

Why is the fiduciary responsibility to Main Street, Taxpayers, and the nation being ignored?

Where is hope and change?

Just more business as usual in Washington? 

Cover your tracks by destroying the nation financially?  Let the little people think they're getting things of value, like healthcare, knowing there is no money to pay for it?

What happened to fiduciary responsibility and IndyMac?

Goldman first put the swap in place in 2001. It immediately sought to hedge its risk to the Greek obligations by making side deals with other parties. In 2005, the entire swap was sold to the National Bank of Greece. But last year, Goldman was back talking to the Greek government about a similar deal that would delay debt obligations.

Sound familiar?  Taxpayers through AIG got stuck with all the derivative messes.  How much of TARP problems originated at Goldman?

Maybe Bush didn't want to buy prior to 2008?  They waited until the election to create a crisis?

Why isn't Obama going after that money? 

Finding the ones responsible for peddling this financial onto the backs of generations of Americans?

Why isn't Obama fighting the perpetual debt created by GREEDY bankers, hedge funds, and global players and foisted onto the backs of taxpayers?


more here - http://blogs.forbes.com/streettalk/2010/02/18/goldman-sachs-shorted-greek-debt-after-it-arranged-those-shady-swaps/

All Obama seems to say is we have to stop demonizing bankers.  Go figure...

Who looks out for taxpayers?

Where are the smart people with integrity who look after the best interests of Americans?