Posted by Karl Denninger
Goldman, of course, will say it still cares about reputation. Tell that to IKB Deutsche Industriebank AG. In 2006, the German bank specifically told Goldman it was no longer comfortable investing in CDOs that didn’t “utilize a collateral manager, meaning an independent third-party,” according to the SEC’s complaint. Goldman told IKB it had such a manager — ACA. It didn’t mention Paulson. IKB lost almost all of its $150 million investment.
Ah, ACA. The much-vaunted and claimed “selection agent.” An independent expert. Really? “Independent” eh?
“ACA had a horrible reputation,” he told me, which led me to ask the obvious question so why would Goldman want ACA’s stamp as selection manager on the CDO they were marketing? Fabrice Tourre, the 31-year-old named as the architect of Abacus, is quoted as insisting that Goldman wanted ACA’s brand name and “credibility” on the CDO.
My source told me to check out who the head of ACA was married to. “I think you’ll find it’s a senior woman at Goldman Sachs,” he said.
Well, yep, it is.
Alan S. Rosenman took over ACA Capital as president and CEO in 2004 – because — wait for it — his predecessor Michael Satz had “personal income tax issues” — (how murky is this story going to get you must be asking?)
Well gee, we knew there was more incest between government and Goldman than you’d find in a caveman society, but what we didn’t know is that the so-called “independent” managers that were performing collateral selection were fucking – literally – the senior management of the firms that were paying them!
Separate and independent firms eh?
Not from where this guy sits.
That gives a whole new meaning to “interlocking” firms, doesn’t it?