# Why isn't the 'market' regulating Goldman Sachs? \[edited title\]

**URL:** <https://boards.straightdope.com/t/why-isnt-the-market-regulating-goldman-sachs-edited-title/538254>\
**Category:** Factual Questions\
**Created:** [May 4, 2010, 4:10am UTC](https://boards.straightdope.com/t/why-isnt-the-market-regulating-goldman-sachs-edited-title/538254 "2010-05-04T04:10:25Z")\
**Posts on this page:** 3\
**Page:** 2

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**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\
**Post date:** [May 4, 2010, 10:41pm UTC](https://boards.straightdope.com/t/why-isnt-the-market-regulating-goldman-sachs-edited-title/538254/21 "2010-05-04T22:41:11Z")

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> [@barbitu8](#):
>
> What has Goldman alleged to have done in the course of transacting as just described that might have violated the securities laws?..

Thank you. That matches how I understood the situation, to a level of detail far beyond the understanding I actually had.

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**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\
**Post date:** [May 4, 2010, 11:11pm UTC](https://boards.straightdope.com/t/why-isnt-the-market-regulating-goldman-sachs-edited-title/538254/22 "2010-05-04T23:11:26Z")

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> [@Wilbo523](#):
>
> Thread title FAIL. The market did put Lehman into bankruptcy.

However the OP accidentally made a good point. Yes Lehman did go into bankruptcy. But the markets are so interconnected that the collateral damage almost brought the system down. It’s kind of like some guy sitting in a dam with a load of explosives. If he was in the middle of a field somewhere, he could blow himself up with not much damage to anyone else. In the dam, we better rescue him or the town downstream will be screwed.

Letting Lehman fail is widely considered to have been a big mistake, no matter how satisfying it is for their CEO to have lost a bundle.

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**Author:** ![barbitu8](https://avatars.discourse-cdn.com/v4/letter/b/839c29/32.png) [@barbitu8](https://boards.straightdope.com/u/barbitu8)\
**Post date:** [May 5, 2010, 10:47am UTC](https://boards.straightdope.com/t/why-isnt-the-market-regulating-goldman-sachs-edited-title/538254/23 "2010-05-05T10:47:33Z")

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> [@LonghornDave](#):
>
> Everything you say is spot on except this one sentence. I don’t really even understand how you can say this when your later explanation is exactly correct. As you say yourself later on, the SEC allegation involves the Paulson fund shorting the security, not Goldman; why do you then say Goldman was betting against it in this sentence? Unless you just made a misstatement here, would you please show me where in the SEC complaint there is any allegation that Goldman bet against the security?

This was not in the SEC allegations because Goldman is allowed to be both a broker and dealer. However, this featured prominently both in the Angelides hearings this past January and in Congress this past week – that Goldman was not only betting against certain mortgage-tied securities, but also was selling some of these same securities to its clients. My use of “The complaint” did not refer to the SEC allegations. My boo-boo.

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