But if you do understand finance, then you know it's a zero-sum game. You can't make a bet for something unless someone else makes a bet against something. As a market maker, Goldman creates these bets. In some cases, it sells both sides. In other cases, it holds one side of the bet. That's literally its business as a principal.
So when Angelides uses an analogy like, "It sounds to me like you're selling someone a car with faulty brakes and then buying an insurance policy on that car that pays you when it crashes," he's demonstrating that he really doesn't understand something very fundamental about finance. You can't be a market maker without sometimes holding a security interest in opposition to the performance of the securities that you sell to investors. And if there's investor demand for that security, then it's insane to blame a bank for capitalizing on that demand, no matter what its view of the performance of that security. Unless Goldman is doing something to influence the performance of the securities its sells -- and it isn't as far as we know -- then it's crazy to hold it accountable for investors making bad bets in buying the products it sells.