The banker robbers

[Hannah Bell]

If a Securities Exchange Commission (SEC) lawsuit against Goldman Sachs is correct, the blowup of the housing market that began in 2007 was in part a controlled demolition engineered by Goldman and John Paulson, a hedge fund manager who got Goldman to create mortgage-backed securities that were meticulously designed to fail.

And if the New York Times is accurate, top Goldman executives--including CEO Lloyd Blankfein--were deeply involved, ordering traders to create ever more dog-dirt securities that would make big money for Goldman and John Paulson once the market crashed.

Much of the media's coverage of the Goldman scandal has focused on the arcane details of the lawsuit. But the essentials are easy enough to understand...Sylvain Raynes, a financial consultant, explained the logic to the New York Times last year:

The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen. When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else's house and then committing arson.

http://socialistworker.org/2010/04/20/the-banker-robbers