America's Financial Meltdown: Metaphors Used to Explain Goldman Sachs' Financial Fraud

Last week the Securities Exchange Commission (SEC) filed fraud charges against Goldman Sachs for defrauding clients by knowingly selling them bad investments and then betting against those investments. In this way Goldman Sachs and other financial institutions like Washington Mutual (WAMU) made money from commissions for arranging the bad investments and by collecting insurance payments when the investments failed. These fraudulent practices led to America's financial meltdown in the three years.

Huffington Post Blogger Ben Craw edited and released an interesting video with segments from different financial news analysts attempting to explain Goldman Sachs' fraud case. This hub highlights some of the metaphors used by finanical news commentators used to clarify what investment banks like Goldman Sachs' and Washington Mutual (or WaMu) did that resulted in America's financial meltdwon.

Watch the video here

A bad car is the first metaphor or analogy used to explain how Goldman Sachs and WaMu defrauded their clients. In essence what Goldman Sachs' did was like knowingly selling a car with faulty brakes to someone else and then buying insurance against the failure of the car. Put another way, what WaMu sales associates did was like selling a race car to another racing team and then betting against the car knowing that the car was faulty and would crash sometime during the race .

A second metaphor for the Goldman Sachs fraud case is that of a poorly constructed house. What the Goldman Sachs and WaMu representatives did was like selling a poorly constructed house to another person and taking out insurance on the house. Or even worse, it's like selling a house to one person and giving them materials to burn it down. In turn, the new owner sells it to a third party and burns it down while the first person collects the.

Like in the video, a third analogy of the Goldman Sachs' finanical fraud case is that it is like a shady promoter setting up a football game for his son's pop warner team. He sets up a game for his son's team against the New York Jets and then, knowing his son's team will lose and betting against his son's team. Or as depicted in the short video, it's like the New York Yankees playing the New York Mets in baseball, allowing the Mets to pick the Yankee's line up, and then placing a bet that the Yankees would lose.