congress is investigating whether some of the banks that sold synthetic cdo's and then bet against them by selling short may have steered their clients toward buying them. this cost insurance companies and pension funds billions of dollars and helped to precipitate the current recession.
we quote: 'one focus of the inquiry is whether the firms creating the securities purposely helped to select especially risky mortgage-linked assets that would be most likely to crater, setting their clients up to lose billions of dollars if the housing market imploded.'
translation: sold clients on investments that they knew were bad, then bet money that their clients would lose their shirts. now remind us why these fine fellows aren't hanging from a gallows somewhere. oh, that's right - they own congress.
names of the banks involved after the jump.
