4 ms·

Correct me if I'm wrong, but towards the end of the bubble (2008) GS had insured (bet against) the CDOs that it had previously been propping up. [1] https://ww

• lmm 9y ago
  They had insurance on assets they held, sure. They bought the CDOs from some parties and sold (CDS on) them to other parties, like any middleman in any industry. A wash trade is something quite different: buying something from yourself, with no other parties involved in either transaction, to show a trade that manipulates the price. There's nothing wrong with being in the middle of a line of trades. The crime is when that line becomes a loop and nothing is actually changing hands at either end.