TITLE

How Goldman Trashed a Town

AUTHOR(S)
Gandel, Stephen
PUB. DATE
July 2010
SOURCE
Time;7/5/2010, Vol. 176 Issue 1, p32
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
The article discusses how the financial firm Goldman Sachs and hedge-fund manager John Paulson used complicated bonds known as Abacus to make billions of dollars at the expense of the residents of Cedar Rapids, Iowa. Abacus was a synthetic collateralized debt obligation (CDO) consisting of credit-default swaps (CDS). In June 2007 the abacus was included in an unregulated structured investment vehicle (SIV) called Rhinebridge which was used by large investors such as corporations and municipalities. The town of Cedar Rapids invested taxpayer funds in the Rhinebridge SIV, only to watch as Rhinebridge later would lose most of its assets as a result of the mortgage crisis in the U.S. As a result, Cedar Rapids suffered substantial financial losses.
ACCESSION #
51795023

 

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