isn t this in many ways history repeating itself? yes. you mean, this is repeating itself? yes, this is the kind of energy that the democrats had in 2006 and again in 2008 because they had something they had a regime to overthrow in the congress and then, you know, in the white house. and so there is no energy in politics like the throw the bums out energy. and the side that has that, especially in midterms, is a very difficult side to bet against. jonathan, on the on what s going on inside the tea party movement, the other thing that he says is they planted their flag and i think what we saw with the rollout of this pledge to america, and we saw frankly a rise up in disagreement, i would say, under the anti-establishment press, the folks based in washington, national review, weekly standard, like the pledge. it was the folks, the conservative writers outside of washington who are sitting there going, wait a minute, guys, you
here essentially is what it is. the guys on capitol hill are steamed that big banks like goldman led us down the read to ruin financially during the big recession of 2008. goldman says we didn t do anything illegal. we know where the line is. we never crossed it. but some people on capitol hill feel maybe it s time to move the line. here s carl levin and lloyd blankfein, the guy who runs goldman-sachs shaking it up a little bit yesterday. you ve made a decision to bet against, to take the short side of a security that you re selling. and you don t think that there s any moral obligation here? put aside the legal obligation. you don t think there s an obligation to tell the person that you re selling this to that you are betting against that security by maintaining a short position in it? it s a very straight forward question. i don t think so. i m trying to answer it or for that matter, if a client came to us and asked us to buy something
what happened was this investor john paul son was bearish on housing and the financial market, didn t have enough to bet against, so he went to goldman sachs in early 2007 and said, if you create this product, this cdo product, i can bet against it, and goldman turned around and sold it to some of its investors, and the accusation is that they didn t tell goldman sachs didn t tell these investors that, hey, john paulson played a role in selecting some of the underlining securities behind this deal. so what part of that is allegedly wrong? it s not the bets, it s not john paul s paulson, not goldman creating an ability for people to bet against the mortgage market. in fact, those turned out to be smart bets in the end. the issue is whether or not goldman was honest with one of its clients that another one of its clients was betting against this, and had some stake in it. yeah, it s not so much that goldman was betting against mortgages at the time. that looks icky to us they were
that the u.s. residential housing market would go, up or down, with goldman sachs playing the role of the bookie. the government now alleges that goldman sachs perpetrated fraud. i don t think they have a case. the government alleges that john paulson s hedge fund chose the securities that it wanted to bet against and asked goldman to find someone who would bet on the other side. goldman says paulson was consulted but didn t actually choose them, but even if paulson had chosen the securities, why is that illegal? this is how markets work. somebody picks a bundle of stocks or securities they wish to bet against. they then ask companies like goldman sachs to find someone who will take the other side of that bet. naturally the guy who s betting against the stocks or securities thinks that they are garbage. that s why he s betting against them. the guy betting in favor disagrees, and it is that disagreement on the quality of the stocks or securities that
goldman made $15 million in fees for helping develop this investment vehicle, that it then sold to these investors. and these investors are the people who ended up losing $1 billion on it. goldman, though, in its own defense, interestingly, tony, also said it lost $90 million on the investment. although we don t know many of the details of how or why it lost that money. but those are essentially the three players, the three people who are at the center of this people, if you will people at the center of this s.e.c. fraud against goldman sachs, tony. i don t have time, but i want to know, why when paulson goes to goldman and says, i want to work with you guys on putting together a portfolio that i will then bet against, why goldman says, okay, we ll play that game with you. but i don t have time. so let s do it tomorrow. are you back tomorrow? okay. i m back tomorrow. i want to make a quick point, that the s.e.c. has not charged paulson with anything. yeah.