Goldman Sachs Messages Show It Thrived as Economy Fell

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The New York Times

Sat, April 24, 2010 -- 9:52 AM ET

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Goldman Sachs Messages Show It Thrived as Economy Fell

In late 2007 as the mortgage crisis gained momentum and many

banks were suffering losses, Goldman Sachs executives traded

e-mail messages saying that they were making "some serious

money" betting against the housing markets.

 

The e-mails, released Saturday morning by the Senate

Permanent Subcommittee on Investigations, appear to

contradict some of Goldman's previous statements that left

the impression that the firm lost money on mortgage-related

investments.

 

In the e-mails, Lloyd C. Blankfein, the bank's chief

executive, acknowledged in November of 2007 that the firm

indeed had lost money initially. But it later recovered from

those losses by making negative bets, known as short

positions, enabling it to profit as housing prices fell and

homeowners defaulted on their mortgages. "Of course we didn't

dodge the mortgage mess," he wrote. "We lost money, then made

more than we lost because of shorts."

 

Read More:

http://www.nytimes.com/2010/04/25/business/25goldman.html?emc=na