Goldman Sachs as a morality tale

NEW YORK, April 22 (UPI) -- A New Jersey HVAC repairman who lost his home to foreclosure in 2008 bestowed his blessing on the hedge fund manager at the center of a major fraud case.

Hedge fund manager John Paulson made $1 billion betting against bonds made up of bundled securities -- bonds made up of nearly 500,000 mortgage loans -- that were assembled by Paolo Pellegrini, who worked for Paulson, and Fabrice Tourre, a trader at Goldman Sachs, The Wall Street Journal reported Thursday.

Some investors, like German bank IKB Deutsche Industriebank AG, bet the mortgages would do well and lost money, while Paulson, working with a data bank that could track 6 million mortgages, bet the opposite.

Paulson made money. Deutsche Industriebank lost $150 million. Heating and air conditioning repairman Jack Booket of Aberdeen Township, N.J., whose loan was included in the Goldman Sachs deals, was hit by a car while riding on a motorcycle in 2006, whereupon his work prospects diminished.

He lost his three-bedroom home to foreclosure.

He wasn't alone. Seven months after Goldman Sachs assembled the so-called Abacus deals, 83 percent of the bonds they included had been downgraded, the Journal reported.

But Booket said he holds no grudge. "The man came up with a scheme to get rich, and he did it. So more power to him," he said.