Do you create markets for yourself (prop trade) with the same clients you make markets for (client trading)?

We have no idea, but most likely, yes.In fact, the same manager, Jerry Ouderkirk, manages both Goldman’s CDO client trading and Goldman’s CDO prop trading desks.

Goldman’s clients would probably like to know whether or not the firm sometimes hopes that the deals they do together go bad.

How do your clients and counterparties know the difference between when you are prop-trading with them and when you are making a market for them?

Based on their answers yesterday, the panel would have answered unanimously that the client doesn’t know the difference and doesn’t care, and they shouldn’t care.But actually, having managers like Jerry Ouderkirk manage both Goldman’s CDO client trading and Goldman’s CDO prop trading business probably confuses the firm’s clients about what is happening when. And maybe that’s on purpose.

When they ask for your position on a trade, what do you tell your clients or counterparties?

In at least one instance yesterday, we found that Sparks told someone that Goldman was long when Goldman was also short.(Then Sparks said he didn’t say he was short too because there were might have been other trades that he didn’t know about.)

We think that’s interesting. Because….

Based on your explanation that they shouldn’t care, why don’t you tell your clients, “no comment?”

Instead of saying “no comment,” Goldman has, in the past, told its clients half-truths. No need for that if they don’t care, just tell them nada.

Could you detail the long/short position Goldman took on the subprime market, each quarter, from 2006 Q1 – 2008 Q3?

It wasn’t illegal for Goldman to short the housing market and we actually think too much time yesterday was spent discussing how short or long Goldman was. Especially because the only clear document we’ve seen shows that Goldman’s “directional” bet against the subprime housing market was tiny ($0.1 billion) and just for one quarter pg. 59.But the Senate was freaking out about how short Goldman was so now we’re curious about those numbers.

(Details may be in this huge 901-page doc, but we couldn’t find them.)

Do you “flash trade” based on the trades your clients have on the book with you? (Push a trade through faster than a client’s huge block trade, so that you are able to buy low before his block buy pushes the price higher?)

This is completely off yesterday’s main topic but it shows Goldman’s free use of practices that are clearly a conflict of interest.Of course it’s perfectly legal to “flash trade” and yes, Goldman flash trades.

(Just Tourre) Why wasn’t ABACUS marketed without the statement “selected by ACA?”

There’s been so much discussion about who actually selected the portfolio that clearly there is plenty (too much) room for confusion and the statement that ABACUS was “selected by ACA,” probably should have been “more accurate” (Tourre’s words) or should have been left off altogether.The real answer that we’d never have gotten out of Tourre is that Goldman needed ABACUS to just say “selected by ACA” so that people would buy it.

Tourre stumbled all over the Senate’s ABACUS questions yesterday.

Could you explain your personal role in the credit crisis?

If you didn’t play any role in the credit crisis, say it.We’re sick of hearing every bank and employee spread the blame around. If you played a role that a bunch of other people played too, explain it.

Were the loans inside the MBS you sold were fraudulent?

This should be interesting.Some of the loans Goldman sold kind of were fraud. Like Kaufman pointed out in the first panel, 50%-90% of the loans inside some mortgage backed securities Goldman sold were stated-income loans or some other kind of loan that should never have been granted.

Does the panel consider these loans fraud now?

If everyone on the panel said “no, we didn’t consider any of those loans fraud,” it’s good to know the kinds of shady products Goldman is totally cool with selling to people.

Did you know they were fraudulent? Did you know they were not fraudulent?

We’re curious. Let’s say everyone on the panel said, “yes, I consider some of those loans fraud and I would never sell them again.”First question – They’d say no, they had no idea the loans were fraud, of course, because it’s illegal to sell something that’s fraudulent. They wouldn’t admit to doing something illegal.

Second question – (Still assuming they all said “yes,” we consider some of those loans fraud.) They’ll have to say, no, we weren’t sure if the loans were not fraudulent (ie we don’t look into those kinds of things at Goldman).