Goldman: We made money betting against mortgage market (Internal e-mail released Saturday)

Source: McClatchy



Goldman: We made money betting against mortgage market

By Greg Gordon | McClatchy Newspapers

WASHINGTON — In an internal e-mail released Saturday, http://thehill.com/images/stories/news/2010/PDFs/goldma... Goldman Sachs 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 U.S. housing market.

Blankfein's e-mail, which a Senate investigations panel released with three other subpoenaed company documents, appears 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 has said that its contrary bets were largely on behalf of its clients.

The release of the documents sets the stage for a confrontation on Tuesday, when Blankfein and six other present and former Goldman executives are scheduled to testify to the Senate Permanent Subcommittee on Investigations, which will begin revealing the results of a yearlong investigation.




Read more: http://www.mcclatchydc.com/2010/04/24/92812/goldman-e-mails-we-made-money.html

Here is WaPo's story. Who knew the mortgage meltdown was so darn profitable?

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/24/AR2010042401049.html

If it doesn't reflect the letter of the law, it certainly does reflect the spirit.

GS was an insider in the sense that they *knew* what those financial instruments were composed of, and how risky they were.

To me, it's absolutely no different than insider trading. And should be prosecuted as such, imho.

Nowadays, not so much. :banghead:

Financial innovation they called it.

We bailed out AIG so that they could pay off counterparties like GS, JPM,... This is the real scandal.
http://www.slate.com/id/2213942/

This guy's blog (Wall Street Manna) has a very interesting running commentary and chronology of Wall Street events over the last few years. Looks like he knew this latest revelation was coming from what he wrote almost a week ago:



http://aaronandmoses.blogspot.com/2010/04/wsj-what-is-material-to-goldman.html

Source: Washington Post

As the U.S. housing market started to slide, executives at the most legendary investment bank on Wall Street, Goldman Sachs, were trading e-mails in which they cheered the declines, even when those declines meant some of their clients were taking major losses, according to newly released documents.

The documents show that the firm's executives were celebrating earlier decisions in which they bet against the housing market, a Senate investigative committee found. In a fall 2007 e-mail, for example, top mortgage trader Michael Swenson was gleeful that credit-rating companies downgraded mortgage-related investments, which caused losses for investors.

"Sounds like we will make some serious money," Swenson wrote.

Lawmakers said the internal e-mails, released Saturday by the Senate Permanent Subcommittee on Investigations, contradict Goldman's assertions that the bank was not trying to make big profits off the decline of the housing market in 2007 and was merely seeking to protect itself if prices collapsed.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2010/04/24/AR2010042401049.html

that was at the expense of the regular person, and the party that was going on - that person is blind in one eye and can't see out of the other.

So there it is for all the world to read, the wall street assholes lied. So if you lie to your bank it's fraud, in some cases, but if they lie to you it's profit. So people out there in the real world, you know the one without caviar and limo rides to work everyday, lie to your banker. Fill him full of shit. Do what you can to get that loan. If we could sink a bunch of banks maybe real people will get their houses back. They need to be stopped for what they have done to AMERICA.

Same old story...Why don't we ever learn?

Such nice boys.

outs..

Correction to This Article (per WP)




When will the 'cuffs, chains and frog-marching begin?

And I wonder if it was public then, if the people would of went for it

they are pigs. They may or may not have violated a law, but surely the public will demand that they disgorge their profits. Surely your broker has a fiduciary duty to warn you and not to bet against your trades. So, to the extent that Goldman advised its clients to buy the sub-prime mortgage securities, it would seem to make sense that they should have advised those same clients that losses were likely.

Source: The Associated Press

By DANIEL WAGNER and DAN STRUMPF (AP)
NEW YORK — As the U.S. housing turned downward in January 2007, a 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."
...
Tourre was talking about investment products like the one at the heart of a federal complaint against his firm. For Tourre, the investments were like an invention gone awry: He had started arranging them when the market was on the upswing. But he continued selling them after the market turned — now with Goldman betting against them, in one case allegedly misleading investors about a deal's origin.

Goldman Sachs Group Inc. released that e-mail and 25 other internal documents Saturday in response to a Senate panel's release of messages in which Goldman executives boast about money they were making as the market imploded later in 2007.

When credit rating agencies downgraded many billions of dollars of mortgage-backed investments in October 2007, Goldman executive Donald Mullen was unabashedly pleased.
"Sounds like we will make serious money," Mullen wrote to Michael Swenson, another executive, in one of the e-mails released by the Senate Permanent Subcommittee on Investigations.

Read more: http://www.google.com/hostednews/ap/article/ALeqM5hJOo6Ubn_quW5ffs-Y0pQIBUk6-wD9F9MR482

---

Crash/Trash into Cash.

no one at ALL!

ESPECIALLY NOT GOLDMAN SUCHS AND ALAN GREENSCUM!!!!11111!!!

You crack me up, UIA.

Did she help to crash the US economy, like she helped to crash Ebay?
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/04/21/MN6C1D2B0H.DTL

the real crime is that nothing much will happen to these fuckers and their ilk.
so many suckers to fleece, so little time ...

Sounds like you should do some serious time.

I knew about the investigation last year. I couldn't say anything about it for confidentiality reasons (and can't say anything else now). But as this particular material is now part of the public record, it's entertaining as hell. If you want further insight into this, 'Fabulous Fab' and several GS executives are testifying in Congress next Tuesday, which will be on c-span...I plan to kick back with a cold beer and watch them get roasted slowly.

"Burn, baby, burn. That's a beautiful thing," a trader sang about the massive fire.

"He just f---s California," says one Enron employee. "He steals money from California to the tune of about a million."

"Will you rephrase that?" asks a second employee.

"OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day," replies the first.


"They're f------g taking all the money back from you guys?" complains an Enron employee on the tapes. "All the money you guys stole from those poor grandmothers in California?"

"Yeah, grandma Millie, man"

"Yeah, now she wants her f------g money back for all the power you've charged right up, jammed right up her a------ for f------g $250 a megawatt hour."
http://www.cbsnews.com/stories/2004/06/01/eveningnews/main620626.shtml

It'll destroy us all.