That’s the expression borrowed from an internal Goldman Sachs email that Sen, Carl Levin chose to cite, again and again, in his questioning of current and former Goldman Sachs executives during this morning’s investigative hearings into the financial crisis.
Actually, as I was listening to the committee’s hearings, it was Sen. Claire McCaskill who was the toughest questioner of the lot.
“It’s gambling, pure and simple, raw gambling. They’re called synthetic because there’s nothing there but the gamble, but the bet.”
“You all are the house. You’re the bookie.”
“People are booking their bets with you. That’s what they’re doing. That’s what a synthetic CDO is. I don’t know why we need to dress it up. It’s just a bet.”
“What’s your vig, Mr. Sparks, on these deals?”
And here’s a link to Zero Hedge’s annotation of Lloyd Blankfein’s written testimony for the committee.