Why did Fabrice Tourre’s security exist?
I refer to the security that he helped to create while he worked at Goldman Sachs. A jury concluded on Thursday that he misled investors, as the Securities and Exchange Commission alleged.
The important thing to understand is that the securitization at issue in no way helped to create capital for anything. It was a pure gamble. One side bet that the mortgage market would collapse. The other bet it would not. I don’t see any difference between that and betting on a football game.
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