Who Do You Believe, Goldman Sachs Or Your Lying Eyes?

Goldman Sachs makes some up-is-down claims today. This fellow tries to interpret:

On Goldman’s betting against its clients, the firm mentions only in passing that it used CDOs to lay off mortgage risk. The reason the use of a CDO is important is that, while the offering documents contemplated all sorts of outcomes, investors would assume that Goldman was acting as an intermediary and had devised its CDO merely to satisfy market demand and lay of mortgage pipeline exposure, acting as an intermediary. But in using a CDO to create a short position, Goldman would have the incentive to dump the very worst dreck possible into the CDO. And had Goldman disclosed its role, investors would have looked at the deal much harder.