Mother Jones: Internal Docs Prove Goldman's Ex-Mortgage Guru Lied Under Oath

* Sparks was among the recipients of an October 30, 2006, email concerning a $2 billion deal called Hudson Mezzanine 2006-1. One of the four products cited during the hearing, this synthetic CDO was downgraded to junk status less than 18 months later. That email shows that Goldman bought all $2 billion worth of protection against Hudson’s failure—meaning that even as the firm helped design the deal for sale to investors, it was betting on and stood to gain from Hudson's demise, which ultimately happened.

* In an email dated February 8, 2007, Sparks wrote: "Subprime environment—bad and getting worse. Everyday is a major fight for some aspect of the business (think whack-a-mole)."

* In a February 21, 2007, email, he wrote: "Bad news everywhere. Novastar (another subprime originator) bad earnings and 1/3 of market cap gone immediately. Wells (Fargo) laying off 300+ subprime staff and home price appreciation data showed for first time lower prices on homes over year broad based."

* In a March 1, 2007, email, Sparks noted that the subprime market was in "disarray" and it had become "clear that many people should not have been given loans." In a section of the email subtitled "Who is feeling the pain," he added, "CDOs"—that is, the product that Sen. Tester referred to during the hearing and that Sparks said he believed would perform.

* In a March 3, 2007, email containing notes from an earlier call, Sparks wrote: "Things we need to do…Focus on any exposures to originators," presumably to avoid losses, as many subprime players were flirting with collapse at the time. He went on to write, "For traders…Don't add risk…Get out of everything."

* According to the minutes of a March 7, 2007, meeting of Goldman's risk committee, Sparks delivered the following prognosis of the subprime mortgage market: "Game Over—accelerating meltdown for subprime lenders such as Fremont and New Century." He was so skeptical of the subprime industry that he told the risk committee, chaired by CFO Viniar, that the firm's mortgage operation "is currently closing down every subprime exposure possible." Meanwhile, Goldman wouldn't close its Abacus deal until the following month.

* In a March 7, 2007, email, Fabrice Tourre wrote, "According to Sparks, that business is totally dead, and the poor little subprime borrowers will not last so long!!!"

* In a March 10, 2007, email to a Goldman colleague, Sparks outlined a handful of positions against the mortgage markets that his own department had taken: "...getting short CDS (credit default swaps) on RMBS (residential mortgage-backed securities) and CDOs, getting short the super-senior BBB- and BBB index, and getting short AAA index as overall protection."