Goldman Sachs tales

This should be a lesson to all those young, aggressive, upwardly mobile Wall Street wannabes who think they are somehow going to fast track their way into the stratosphere of high finance.

Sorry, kids!  There’s no room left at the top, and soon you’re going to see even those old money families tearing each other apart for what’s left of a collapsing fiat money system that has just about run its course.

I submit to you the unfortunate tale of Goldman Sachs’ naïve boy protégé, Fabrice Tourre, the so-called ‘Fabulous Fab’ who is alleged to be the mastermind behind a scheme to sell toxic mortgage investments that were deliberately designed to fail in the US housing market crash.

Fabrice Tourre, 31, is the classic patsy and the kind of villain the American people love to hate.  He’s foreign (French), flamboyant, young, rich and shrewd.  He  was only 22 and fresh out of college when he started working for Goldman Sachs in 2001.  Just five years into his employment, he found himself at the center of a scheme devised by one of the world’s richest billionaires, hedge fund manager John Paulson.

Paulson had presented a roster of sub-prime mortgage deals that he was betting would fail in the housing market.  He paid Goldman Sachs $15 million to find clients that would bet the other way.  The scheme was packaged into what has come to be known as an ‘Abacus Deal’.

Tourre is alledged to have taken this portfolio to potential investors and sell them as favorable risks while hiding the fact that he was working with Paulson, who was betting against them.

To help with pitching these toxic investments, they employed the services of ACA Capital Holdings, Inc. and convinced them that Paulson was actually investing in these mortgages.  Tourre and Paulson then used ACA’s endorsement of the mortgages as a credible and sound investment.  Everything went as planned and Paulson cashed in on a cool $1 billion while the Goldman Sachs investors took it in the shorts.

Now the SEC has been called in to restore their tarnished image with the public by bringing suit against the investment giant and taking aim, in particular, at the novice Tourre.  So far, the SEC has conducted five interviews including one with the now notorious ‘Fabulous Fab’.  They have not elected to interview any one of the top Goldman Sachs executives, including  Tourre’s manager Jonathan Egol.  They’ve also apparently found no need to trouble Mr. Paulson with any of their inquiries.  Goes to show you that only the little minnows get swallowed up in the cesspool of Wall Street.

More…Goldman Sachs Eats Its Young « Revolt of the Plebs

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