Hey, a giant vampire squid’s gotta eat, you know?
Flashback: German bank severs Goldman ties | Goldman Sachs Eats Its Young | Goldman Sachs charged with $1bn fraud over toxic sub-prime securities | Goldman fights accusations of greed | Wall Street: Looting Main Street | J.P. Morgan rolls into Calgary | JPMorgan, Citigroup Helped Doom Lehman, Report Says | Goldman role in Greek crisis probed | How EU Countries Cooked Books Using Derivatives | Goldman Sachs Helped Greece Obscure Debt Through Currency Swaps | America slides deeper into depression as Wall Street revels | How Goldman secretly bet on the U.S. housing crash | Goldman Sachs breaks record with $16.7bn bonus pot | More US Bank Failures and The Coming Deposit Insurance Bailout | Arrest Over Software Illuminates Wall St. Secret | The Lords of Time: Goldman Sachs and low-latency trading | Record quarterly profits and bonuses: Goldman Sachs makes out like a bandit on taxpayer’s dime | Goldman-Sachs: Pilfered trading code could be used to ‘manipulate markets’ | Taibbi: NYSE ends transparency to protect Goldman Sachs | Central banks to take off ‘training wheels’ | Goldman Sachs: The Great American Bubble Machine | 10 U.S. banks to repay U.S. bailout money | Top Senate Democrat: bankers “own” the U.S. Congress | Barclays, Lloyd’s, RBS join Goldman-Sachs in the black | Goldman-Sachs to repay TARP loan, resume private operations, bonuses, at “earliest time” possible | Which Banks Will Rule? | Wall Street’s Big Takeover | IMF may need to “print money”, act as “world’s central bank” as crisis spreads | Behind the panic: Financial warfare over the future of global bank power | Goldman-Sachs Alumni Hold Reins of Financial System | What Really Killed Bear Stearns? | Soros points out regulated markets fail to operate on market fundamentals, calls for more regulation | Competition study calls for lowered barriers to foreign ownership, bank mergers | Massive overhaul urged on foreign investment in airlines, media, and banks | Bilderberg Seeks Bank Centralization Agenda
Andrew McLemore, Rawstory.com
April 24, 2010
Goldman Sachs’ top executives were aware that the company made money by playing against the US housing market, according to internal e-mails released Saturday.
The bank’s chief executive Lloyd Blankfein wrote in November 2007 that the firm “didn’t dodge the mortgage mess,” but “made more than we lost” by betting against the housing market, the Associated Press reported.
The e-mail was one of several company documents subpoenaed by a Senate investigations panel. In many of the e-mails, Goldman executives brag about money they were making as the market crashed around them.
One Goldman Sachs trader wrote in e-mails to a woman he apparently was courting that investments he had sold were “like Frankenstein turning against his own inventor.” In another e-mail, the same trader dismissed the debts created for the bank as “pure intellectual masturbation.”
“I’m trading a product which a month ago was worth $100 and today is only worth $93,” wrote Fabrice Tourre, who was charged along with the bank in a civil complaint filed this month by the Securities and Exchange Commission. “That doesn’t seem like a lot but when you take into account … (the investments) are worth billions, well it adds up to a lot of money.”
The documents seem to contradict Goldman’s denials that it profited from the subprime mortgage meltdown by secretly betting that housing prices would fall. At the same time, Goldman was selling tens of billions of dollars in risky mortgage securities.
Goldman Sachs, the world’s largest investment bank, was the only major Wall Street firm to escape much of the subprime crash that triggered a world-wide economic meltdown.
The company now says that it only bet against the market for the sake of its clients.
According to media reports, the bank is already preparing a detailed defense against accusations that it intentionally misled the public and therefore shares guilt for the economic crisis.
The supposedly 11-page-long document will be used by Blankfein when he testifies Tuesday in front of the Senate Permanent Subcommittee on Investigations.
The e-mails are only the latest scandal that will help Democrats push financial reform through Congress, according to New York Times columnist Frank Rich.
He added, however, that it remains uncertain how much influence the banks’ lobbyists will exert over the legislation:
Salutary as this rush of events is, it still adds up so far to just one small step for mankind. We don’t yet know how many loopholes lobbyists will slip into the bill-in-progress. We don’t yet know the outcome of the S.E.C. case, let alone what other much-needed legal pursuit of Wall Street may follow it. And we still don’t know what, if any, true correction lies ahead for the financial sector’s runaway casino culture – much of it legal – that turned a subprime-mortgage bubble in a handful of overheated American states into an international economic meltdown.
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