Justin Solomon for CNBC.com

Goldman Sachs
[GS  153.04    1.01  (+0.66%)   ]

I call it a "rumble" for rich white guys.

Some of the Senators don't fully understand Goldman Sachs' business, and some of the executives have trouble answering clear, direct questions.

Was it legally wrong for Goldman Sachs not to disclose everything it knew about Abacus to buyers? Was it, at the very least, unethical? Or should ACA and others have done more due diligence and
assumed everyone involved was hedging their bets with short positions? Should
ACA have hedged as well?

Someone suggested to me on Twitter that we might better understand what happened by replacing the word
"Abacus" with the old Ford Pinto, the car made infamous for blowing up when rear
ended.

Imagine this testimony instead:

Senator: Did you know the Pinto was a sh--ty car?

GS: I'm not sure what you mean.

Senator: When you sold this sh--ty car to ACA, did you have a duty to tell them it was sh--ty?

GS: ACA is a major car dealership and had access to the Pinto's history.

Senator: So they wanted to buy a Pinto?

GS: Yes.

Senator: And you sold them one.

AP 1978 Ford Pinto

GS: Yes. But we bought some Pintos, too.

Senator: But then you bought insurance on the Pintos in case they blew up?

GS: Yes.

Senator: Did you tell ACA you bought insurance?

GS: No.

Senator: Even though you knew the Pintos could blow up.

GS: Everyone should've known they could blow up.

Senator: But why didn't you tell them the Pinto could blow up?

GS: Because it was my job to sell Pintos.

I definitely agree with the author that the hearing was both educational and entertaining.

I watched part of the hearing especially the part when John McCain asked the question. He was totally lost when Blankfein was trying to explain to him what synthetic CDO was.He was lost to what a CDO was and was misearbly lost in space about the synthetic definition.