GETTING TO THE TOP OF THE BOTTOM (OR THE BOTTOM OF THE TOP)

Did Fab act alone?

WB7: Many are wondering why a single 31 year old French hairdresser named Fabulous Fab is the only Goldman Squid singled out as a defendant in the Abacus complaint. The answer is hardly that Fab acted alone.

Goldman prides itself on its superior risk management skills (trading and reputational). Remember, trust and reputation are an investment bank's stock in trade. Was Fab able to slap the Abacus scam together flying under Goldman's risk management radar? At the time he was a lowly 28 year old VP. That's one rung up from analyst, the bottom of the Wall Street totem pole.

Did Goldman get to where it is today by allowing VPs to structure and sell complex and ethically challenging transactions without risk control? Hardly.

I don't know what kind of minutes Goldman's Mortgage Capital Committee keeps, but I sure would like to see what was said about the reputational risk involved in this transaction. Particularly since Bear Stearns apparently refused to structure an Abacus style trade for Paulson for that precise reason.

But friends, what do you think is the likelihood that those minutes, if they ever existed, will ever see the light of day?

UPDATE: NYT