[nl]

RBS bought subprime mortgage backed securities - the same ones that were (mostly) created by Goldman[1].

RBS (along with most buyers) didn't realize that the AAA-rated securities they bought were actually subprime-backed (because of completely stupid rules by the ratings agencies, which Goldman exploited)

When people suddenly discovered what a disaster these were, RBS wrote down £5.9bn, and was forced to seek additional capital[2].

RBS was responsible for heir own fate of course. But Goldman sure made money out of it.

[1] http://www.telegraph.co.uk/finance/recession/5025115/RBS-tra...

[2] http://news.bbc.co.uk/2/hi/business/7096845.stm

[Lazare]

Goldman did not invent CDOs, and they did not create the CDOs RBS purchased. (Also, what actually doomed RBS was overpaying for ABN Amro, but that's neither here nor there.)

> But Goldman sure made money out of it.

How? Exactly?

[nl]

The sold the securities and shorted them at the same time.