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Fabulous Fab's love letters to Goldman Sachs

As readers of this blog know, I have developed a fascination with the self-described "fabulous" Fabrice Tourre, the 31-year-old Goldman Sachs executive at the heart of the SEC's fraud charge against the powerhouse Wall Street firm.

Tourre designed the exotic financial instrument -- a synthetic collateralized debt obligation call "Abacus," or AC-1 -- that hedge fund manager John Paulson used to short the housing market. ACA, an investor in Abacus, helped picked the portfolio's investments. IKB, a large German bank, was an investor in Abacus.

Over the weekend, Goldman released several of Tourre's e-mails from 2007 to his girlfriend, in which he talks about his role in the transaction and his feelings about it. The e-mails are a curious mix of tender affections and high finance. For instance:

"When I think that I had some input into the creation of this product ... it sickens the heart to see it shot down in mid-flight. It's a little like Frankenstein turning against his own inventor. ;) ... I believe that a soft and sensual feminine intervention is necessary for Fab's survival."

In testimony Tourre plans to deliver today before the Senate Permanent Investigations committee, along with Goldman chief executive Lloyd Blankfein, he says: "I deny -- categorically -- the SEC’s allegation. And I will defend myself in court against this false claim."

Here are some other excerpts of Tourre's testimony:

"Goldman Sachs also had no economic motive to design the AC-1 transaction to fail. Quite the contrary, we held long exposure in the transaction just like ACA and IKB. When the securities referenced in AC-1 declined in value, we lost money too. Goldman Sachs’ overall losses in connection with the transaction exceeded $100 million, including $83 million with respect to the retained long position."

Tourre's testimony concludes:

"Mr. Chairman, the last week has been challenging for me and my family, as I have been the target of unfounded attacks on my character and motives...I wish to repeat -- I did not mislead IKB or ACA, two of the most sophisticated institutional investors in these products anywhere in the world."

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By Frank Ahrens  |  April 27, 2010; 9:19 AM ET
Categories:  Congress , Corporations , The Ticker  | Tags: Business, Collateralized debt obligation, Fabrice Tourre, Goldman Sachs, Hedge fund, John Paulson, SEC, Wall Street, video  
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Mr. Ahrens, if you bothered to do some additional research, you'd see that "Fabulous Fab" was not a self-proclaimed moniker. The full original email clearly states that said name was something that, "Mitch would kindly call me, even though there is nothing fabulous abt me...." This little section (as well as other mushy parts of the email) were omitted in the SEC complaint. Now that the full email is out, let's not be so sloppy.

Posted by: RonPaulson | April 26, 2010 3:44 PM | Report abuse

The fee males keep upstaging themselves rolling the dice and the females keep rolling their eyes. The kids need fed, the diapers need changed, we need groceries and so on. Honey I shrunk the portfolio. Sorry, it won't happen again. I promise. It's just another cold case to me. Can you pick up a case of stout on the way home?

Posted by: tossnokia | April 26, 2010 3:46 PM | Report abuse

I just got the Cure Disintegration CD in. Fascination Street sounds like Wall Street. It's raining. I'm begging to drag you down with me to kick the last nail in yeah i like you in that i like you to scream...They'll be fascinated.

Posted by: tossnokia | April 26, 2010 5:23 PM | Report abuse

So, he will only be testifying before this 10 person committee and not the full Senate?

Posted by: the_marvelous_marv | April 26, 2010 5:52 PM | Report abuse

I love how they keep saying 'they were sophisticated investors' to try to cover their collective @$$E$.

Lying is lying.

Posted by: cavatellie | April 27, 2010 10:37 AM | Report abuse

Piracy dropped when the pirates got more sophisticated and figured they could make more as smugglers. Now it's looking like the smugglers blues. It's a losing prop position, but one you can't refuse. Lost $100 million? Try selling green golf balls.

Posted by: tossnokia | April 27, 2010 10:41 AM | Report abuse

I don't care what you call the 'hole.

I think everyone who lost money because of this twerp's nifty ideas should get an opportunity to drive a hard blow to his midsection - maybe aim at his twerpish mouth, to boot.

EVERYONE who lost money wants this opportunity to let him know who the heck's money he's playing with - not his own.

In fact I think letting everyone who has lost money due to this scheister should get this opportunity and should be the litmus test; if you do this kind of stuff in the financial markets, like the bridge engineer who stands beneath his work it the time it is first tested under load, you should pay for the failures as well, and not walk off with a fabulous bonus after the collective screwing of American investors.

Posted by: pgibson1 | April 27, 2010 1:34 PM | Report abuse

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