Comments on: Goldman Sachs’ Stolen Umbrellas http://themoderatevoice.com/51427/goldman-sachs-stolen-umbrellas/ An Internet hub with domestic and international news, analysis, original reporting, and popular features from the left, center, indies, centrists, moderates, and right Wed, 30 May 2012 20:57:06 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: rawdawgbuffalo http://themoderatevoice.com/51427/goldman-sachs-stolen-umbrellas/comment-page-1/#comment-227504 rawdawgbuffalo Mon, 02 Nov 2009 19:51:14 +0000 http://themoderatevoice.com/?p=51427#comment-227504 <a href='http://rawdawgb.blogspot.com/2009/11/wall-street-dc.html' rel="nofollow">Wall Street, DC</a> strikes again http://rawdawgb.blogspot.com/2009/11/wall-street-dc.html&#39; rel=”nofollow”>Wall Street, DC strikes again

]]> By: mikkel http://themoderatevoice.com/51427/goldman-sachs-stolen-umbrellas/comment-page-1/#comment-227422 mikkel Mon, 02 Nov 2009 16:31:43 +0000 http://themoderatevoice.com/?p=51427#comment-227422 Warren Buffett called exotic derivatives "weapons of financial mass destruction" with the reasoning that even if you made the correct call by doing what GS did you would still lose money. The reason is because in a crash the counterparty (e.g. AIG) would fail from having too much to pay out and so your hedges will collapse.<br><br>Of course GS got around this by being the government "advisor" on what to do about AIG and recommended (with the approval of Geithner) that the government pay out at full. Thus they helped contribute to the downfall of the system and got around the inevitable downfall by getting the government to make them whole.<br><br>Socialize the losses, privatize the profits, indeed. Warren Buffett called exotic derivatives “weapons of financial mass destruction” with the reasoning that even if you made the correct call by doing what GS did you would still lose money. The reason is because in a crash the counterparty (e.g. AIG) would fail from having too much to pay out and so your hedges will collapse.

Of course GS got around this by being the government “advisor” on what to do about AIG and recommended (with the approval of Geithner) that the government pay out at full. Thus they helped contribute to the downfall of the system and got around the inevitable downfall by getting the government to make them whole.

Socialize the losses, privatize the profits, indeed.

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