Ex-Goldman Trader Who Said $8 Million Bonus ''Too Low'' Involved in Fraudulent Activities

[Octafish]

30. Truly outstanding idea, Initech! The next ''Big Thing'' from Goldman Sachs!

The Next Big Thing for Goldman Sachs Guy, Deeb Salem

GoldmanSachs666.com, Tuesday, August 7, 2012

A former Goldman Sachs trader, Deeb Salem, who helped to handle Goldman's bets against sub-prime mortgages that collapsed in 2007, and who tried to manipulate derivative prices tied to loans, is now helping a hedge fund reap further rewards from wagering on US home-loan bonds.

The effects of Goldman's guys on the economic system are like the proverbial stone thrown into a pond: the ripples of their influence on the economy just continue outwards forever.

Banks and hedge funds will go to any lengths in order to make bigger and better returns. Now they are profiting again from the original crisis that they caused! Note that the article says that "Yields will be greater if forecasts for foreclosures, recoveries or refinancings among the underlying loans prove too pessimistic." In other words, more money will be made if recovery or refinancings are not carried out. (That maybe explains why foreclosed homes have not been properly refinanced through government policies.)

[font color="red"]There is something inherently evil about a bank or hedge fund that creates more and more wealth for itself by taking advantage of the misfortunes of others![/font color]

One wonders what the hedge fund has in mind. Maybe it could buy up thousands of foreclosed upon houses and rent them. They could create higher and higher rents so that defaults will occur. CDOs based on rents could be sold to investors. Then the hedge fund could buy CDS in case of default and, wonder of wonders, we have another round of scams to contend with. Where will it all end?

GoldenTree Hires Goldman Sachs Trader Salem In Mortgage Push

By Jody Shenn - Bloomberg
. . . .

Subprime Securities
Returns on senior subprime securities from 2005 through 2007, the years that produced the most defaults, have averaged more than 26 percent this year, Barclays Plc index data show.

Salem joined Goldman Sachs in 2001, according to records maintained by the Financial Industry Regulatory Authority, which don’t show him involved in any regulatory actions, civil lawsuits, criminal matters or customer complaints.

During the mortgage meltdown in 2007, he was the bank’s lead trader of single-name credit-default swaps referencing residential-mortgage-backed securities, according to the 2011 report by the Senate’s Permanent Subcommittee on Investigations.

His group was “able to learn from our bad long position at the end of 2006 and layout the game plan to put on an enormous directional short,” Salem said in a 2007 self-evaluation excerpted in the report. “The results of that are obvious.”

‘Short Squeeze’
Company documents also showed Goldman Sachs traders led by Michael J. Swenson sought to encourage a “short squeeze” by putting artificially low prices on swaps that would gain in value as mortgage securities fell, the panel said. The idea, abandoned after market conditions worsened, was to drive holders to sell and help the bank buy at reduced prices, according to its report.

SOURCE w link to Original Article quoted: http://www.goldmansachs666.com/2012/08/the-next-big-thing-for-goldman-sachs.html