Continuing from where I left off earlier today regarding the Goldman Sachs - Paulson & Company debacle...
What would have happened if the collateralized debt obligations were created and sold exactly as was done, shorted by Paulson, and the eventual buyer was Warren Buffett?
First of all, "my pal Warren"
would not let his position be known to anyone beyond normal filing requirements and perhaps announced at some later date. Second, if it was disclosed that Buffett was betting against Paulson, Mr Paulson would be a huge fool if he did not think twice about his shorting the CDO given this new piece of information. Third, should the buyers of the actual CDO be treated differently than Buffett, or you or me? Of course not.
If I were CEO Blankfein, that is what I would have tossed back at Congress.