It was always the same conversation. Create a synthetic that follows the yield curve but gives you some juice over treasuries. Create some sort of RAV (remote asset vehicle) and then get that AAA pixie dust sprinkled on top of it . Usually the person describing it was a current or past associate of a Master of the Universe.
Yield pigs would line up at the trough if it was as safe as treasuries but had some juice, they proclaimed.
Different than all the known exotics that we've heard of - they spoke about this new 'straw into gold' synthetic.
This synthetic could be applied to anything- hence the RAV- much like Palin's turkey chopper, a construct that would suck in any sizable asset and spit out the synthetic.
Having a Heston moment as I read the WSJ describe how the dirty apes:
'In effect are issuing(Goldman) synthetic Treasury bonds, at a much higher yield than straight Treasury bonds."
The article goes on to say: "Responding to banks' urging, the Treasury department agreed to guarantee the bonds, backing the "full faith and credit" of the U.S. government." "Citigroup, General Electric (as well as JP Morgan and Morgan Stanley named elsewhere - AM) and other companies have signed up to sell bonds under the plan."
You had to go and do it didn't you? You had to go and blow it all up...