If you have Firefox as a web browser, I suggest you have a look at the little bar that pops up when you hit "Ctrl + F" ... note the two citations, one for Der Spiegel and the other from USA Today, in the below section...
""
Goldman Sachs between the years 1998-2009 has been reported to systematically help the Greek government to mask its national true debt facts.[72] In September 2009, though, Goldman Sachs among others, created a special Credit Default Swap (CDS) index for the cover of high risk national debt of Greece.[73]
""
By assisting Greece in hiding this information, the apparent level of risk of the debt was lower; people who bought Greek debt as a consequence under-priced the risk. This can be demonstrated by reality, as when the info got out, Greece's cost of borrowing went up rather than going down.
Therefore, GS' involvement in this matter led to investors losing money they otherwise would not have, which is ... unethical.
Helping a country or company withhold information that is known to be material from investors, is unethical.
No different than telling someone the tires they are buying are rated to last 60K miles when actually they are only rated to last 30K, except you have blotted out the big sticker on the tire that states that.
That the SEC, as for example in the case of Madoff, was told explicitly for years beforehand of the fraud, and did nothing, is a matter of public record.
A more skeptical person might therefore wonder what else the SEC is remiss at investigating. However you have the right to be incurious if you so choose.
Okay, I'll admit found the [73] citation the first time I searched, which is hardly indicative of wrongdoing, but I'll repost what I said earlier about the Der Spegiel [72] article in a separate thread:
> "[That article] I have little comment on, because it provides no useful contextual information. Trying to read this account of financial engineering is like trying to read about a science study in the daily paper. All the details are left out, and a newspaper cannot be trusted to get the big picture right. The phrase "special kind of swap with fictional exchange rates", for example, might be accurate, but it just smells like the writer misunderstood a forward contract or something."
I did some more digging and apparently the financial instruments in question are actually currency swaps (which one paper incorrectly calls forex swaps). Currency swaps are a legitimate financial instrument used by governments all over the place, and they come in different flavors. What are these swaps, how precisely are they sinister, and why?
I actually kind this find of stuff fascinating and will probably do more digging today, instead of working. I'd be surprised, though, if it turns out to be anything more than just another swap.
If you have Firefox as a web browser, I suggest you have a look at the little bar that pops up when you hit "Ctrl + F" ... note the two citations, one for Der Spiegel and the other from USA Today, in the below section...
"" Goldman Sachs between the years 1998-2009 has been reported to systematically help the Greek government to mask its national true debt facts.[72] In September 2009, though, Goldman Sachs among others, created a special Credit Default Swap (CDS) index for the cover of high risk national debt of Greece.[73] ""
By assisting Greece in hiding this information, the apparent level of risk of the debt was lower; people who bought Greek debt as a consequence under-priced the risk. This can be demonstrated by reality, as when the info got out, Greece's cost of borrowing went up rather than going down.
Therefore, GS' involvement in this matter led to investors losing money they otherwise would not have, which is ... unethical.
Helping a country or company withhold information that is known to be material from investors, is unethical.
No different than telling someone the tires they are buying are rated to last 60K miles when actually they are only rated to last 30K, except you have blotted out the big sticker on the tire that states that.
That the SEC, as for example in the case of Madoff, was told explicitly for years beforehand of the fraud, and did nothing, is a matter of public record.
A more skeptical person might therefore wonder what else the SEC is remiss at investigating. However you have the right to be incurious if you so choose.