Anyone really surprised that this is the way the big Wall Street investment banks work?The system is rigged ... it’s just that simple…
Tidbits from the complaint:
Portions of an email in French and English sent by Tourre to a friend on January 23, 2007 stated, in English translation where applicable: “More and more leverage in the system, The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab[rice Tourre]…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!”
(SAT: Tourre an Executive Director at Goldman Sachs is now only 31 years old)
Similarly, an email on February 11, 2007 to Tourre from the head of the GS&Co structured product correlation trading desk stated in part, “the cdo biz is dead we don’t have a lot of time left.”
(SAT: Keep in mind that Tourre was responsible for structuring and marketing CDOs that are now alleged to have been purposely created for failure.)
A Paulson employee explained the investment opportunity as of January 2007 as follows:
“It is true that the market is not pricing the subprime RMBS wipeout scenario. In my opinion this situation is due to the fact that rating agencies, CDO managers and underwriters have all the incentives to keep the game going, while ‘real money’ investors have neither the analytical tools nor the institutional framework to take action before the losses that one could anticipate based [on] the ‘news’ available everywhere are actually realized.”
