On the recordApril 28, 2010
As I watched yesterday's Senate investigations subcommittee hearing, I was disappointed to discover it was not just the greedy, irresponsible, and likely illegal actions of some of Goldman Sachs' more dubious employees that were the center of attention. In fact, the useless and dangerous financial instruments known as synthetic collateralized debt obligations, or CDOs, shared the spotlight as well. Fabrice Tourre, one of Goldman's hotshot young stars who created and sold these so-called investments to Goldman's clients, testified yesterday that they were, quote, ``things which had no purpose,'' and likened them to Frankenstein's monster. Sadly, he's right. These CDOs did nothing for our economy and spread billions of dollars in toxic assets, heightened speculation, and added dangerous risk to our financial system that ultimately was borne by the U.S. taxpayers. Meanwhile, Goldman Sachs and others reaped millions of dollars in bonuses even as the economy was crashing. These synthetic CDOs were synthetic garbage. Unscrupulous individuals on Wall Street worsened the financial crisis by creating garbage, selling it and betting against it. Oh, they drove away with a garbage truck full of cash. Let's ban the creation and sale of them, and prevent this from ever happening again.
