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Fabrice Tourre, the Goldman Sachs executive accused by the Securities and Exchange Commission of making misleading statements about toxic investments, had a grandiose view of his own position in the financial system, according to emails the SEC said he wrote.

An email by Tourre, according to the SEC’s complaint against him and Goldman Sachs, proclaimed, “More and more leverage in the system. The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab(rice Tourre)…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!!” (Sic)

That email was sent to a friend of Tourre’s, according to the SEC complaint.

His department was also of the view that CDOs were in terrible shape, according to the SEC. A Feb. 11, 2007 email that the complaint says was sent to Tourre by the head of Goldman Sachs’ structured production correlation trading desk allegedly said, “the cdo biz is dead we don’t have a lot of time left.”

The SEC said Goldman Sachs and Tourre misled investors about a synthetic collateralized debt obligation, or CDO, that hinged on the performance of subprime residential mortgage-backed securities…

The CDO, called ABACUS 2007-AC1, was structured and marketed by Goldman in early 2007 when the U.S. housing market and related securities were beginning to show signs of distress, the SEC complaint said.

According to the SEC, Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that John Paulson, a major hedge fund manager, played in the portfolio selection process, and the fact that the hedge fund had taken a short position against the CDO. Neither Paulson nor his hedge fund company were named as defendants in the SEC complaint.

These crooks all play by the same rules – or in the case of this recession – play by the absence of rules and oversight. Something the Republican Party is about to say NO to, once again. The last thing they want is for the real money in this land to be hampered by living up to the law.

These cruds at Goldman-Sachs did the same thing on a global scale. Only they had their Republican buddies from the Contract on America handling things for them in the federal government. Deals that weren’t worth the paper they were written on – floated merrily downstream – no oversight, no regulators worth their salt would actually look at their dealings.