Not sure of that characterization of whom selected the bonds that were shorted. As I understand what was happening, the mortgage bonds were sold in tranches lowest to highest tiered by the credit worthiness of the borrowers (of course, most of that was a sham anyway). Then the bonds were again retiered into financial packages called Collateral Debt Obligations such that the lowest tiered, and highest risk tranches, of many bonds became one CDO and that CDO would be tiered again making virtually worthless paper AAA rated. Those were the items that Paulson bought credit default swaps upon...he was betting against items packaged by GS, not the other way around. Again, that is how I see it.
What galls me about this whole thing is this is a CIVIL suit. I want these clowns in Jail for criminal fraud. Guys like Kosloski at Tyco and those guys are Enron are doing real time and they were pikers compared to the bums at GS, Deutch Bank, Merrill, Lehrman and a few others.
Vince
THIS is the issue the Tea Party should get fired up about! If we have a deficit and no jobs it’s because these guys essentially pulled all the money out of circulation - they aren’t making any jobs with their billions. They’re just gambling more and parking it in offshore and Swiss accounts.
These guys are more corrected than the Dems could ever be.