Wikinvest Wire

Gasparino on Taibbi on Goldman

Monday, August 03, 2009

Charlie Gasparino's take-down of Matt Tiabbi and his Rolling Stone article about evil Goldman Sachs contains the following paragraph about getting the blessing of the ratings agencies for subprime mortgages and shorting those same securities.

Later, he went as far as to say that Goldman likely committed "securities fraud" because it later shorted the same mortgage bonds tied to subprime loans after it knew that billions it underwrote all those years were going bad (try proving that one), and that Goldman somehow forced the bond raters—Moody's, Standard & Poor's, and Fitch—to place all those Triple-A ratings on subprime bonds. (Given the huge fees for rating mortgage debt, I know for a fact that Goldman hardly had to twist any arms on this one.)
The childish "try proving that one" rebuttal to the securities fraud allegation aside, it is the logic regarding the ratings agencies that escapes me here...

There can be no coercion so long as the one who's purportedly doing the coercing is paying the other party huge fees?

And the fact that Goldman paid huge fees for the ratings it wanted and got is OK?

Nothing to see here? Move along?

2 comments:

Anonymous said...

Gasparino himself is so immoral and corrupt that he it isn't possible for him to see just how improper the rating agencies' relationship with issuers is.

Anonymous said...

Felix Salmon does a take-down of the take-down here.
Once Charlie referenced something written by Ben Stein, I actually started to feel sorry for him......

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