iceberg, an iceberg that is the mortgage security market. too much gambling caused it to crash and sink. who threw the lifeline to that financial system? you know it, the u.s. taxpayer. but the story begins at jack s house. reporter: this is the house jack bought, in aberdeen, new jersey, heating repairman. he felt behind on his mortgage, so far behind that he lost the house to a foreclosure. on monday, it was put up for auction at the monmouth county hall of records. this is hedge fund manager john paulson, he bet that jack and thousands of other americans would not be able to pay their mortgages. paulson bet right and made a billion dollars. this is goldman sachs, the nation s most prestigious investment firm. goldman sachs set up the bet for paulison. jack s house was one of the cards and goldman sachs was
jersey heating repairman. jack fell behind on his mortgage, so far behind that he lost the house to a foreclosure. on monday it was put up for auction at the county hall of records. thank you for inviting me to appear today. reporter: this is hedge fund manager john paulson, he bet that jack and thousands of other americans would not be able to pay their mortgages. paulson bet right and made $1 billion. this is goldman sachs, the nation s most prestigious investment firm. goldman sachs set up the bet for john paulson. jack s house was one of the cards and goldman sachs was supposed to be shuffling the deck. german bank i kbbet that jack and thousands of other homeowners could pay their home mortgages. they bet wrong and lost $150 million. this is the u.s. securities and exchange commission. it says goldman sachs committed fraud by letting paulson pick the cards at the gambling table
appear to today. reporter: this is head fund manager paulson, he bet that jack and thousands of other americans would not be able to pay their mortgages. paulson bet right and made a billion dollars. this is goldman sachs the nation s most prestigious investment firm. goldman sachs set up the bet for john paulson. jack s house was one of the cards, and goldman sachs was supposed to be shuffling the deck. german bank ikb bet that jack and thousands of other homeowners could pay their mortgages. ikb bet wrong and lost $150 million. this is the u.s. securities and exchange commission. it said goldman sachs committed fraud by letting paulson pick the cards at the gambling table without telling ikb. allegations against goldman sachs are that they sort of loaded the dice, stacked the deck, by designing a portfolio that was weaker than average. reporter: the s.e.c. says ikb was a victim, but ikb is not
and why many are push for financial reform. our allan chernoff explains how goldman sachs allegedly bet against you and your neighbors. reporter: this is the house jack bought. jack in aberdeen, new jersey, repairman. jack fell behind in his mortgage. so far behind that he lost the house to a foreclosure. on monday it was put up for auction at the momnmouth. this is hedge fund manager john paulson. he bet that jack and thousands other americans would not be able to pay their mortgages. paulson bet right and made a billion dollars. this is goldman sachs, the nation s most prestige use investment firm. goldman sachs set up the bet for john paulson. jack s house was one of the cards. and goldman sachs was supposed to be shuffling the deck. german bank ikb bet that jack and thousand other homeowners
essentially setting up this sham operation, bundling together mortgage securities and have paulson bet against them. the answer i ve gotten is no. but it would provide more transparency, because, you know, transparency the question i have is, transparency i get that stuff in the mail from your financial people, your 401(k). it s like, oh, my god, this just wasted another tree. let me throw it away. i don t understand it. i m going to put up now a possible name, if things go well over the next year, for the 2012 republican sweepstakes. it s a man who would be the anecdote to barack obama i know what you re going to say. you want style, he doesn t have it. yep. you want big spending. he s not going to give it to you. you want somebody that s going to meekly go along with everything you want? this isn t your guy. you want someone really fit and healthy and muscular.