Posted on 04/03/2011 12:17:36 PM PDT by NormsRevenge
WASHINGTON (AFP) – The Senate will soon issue findings of a probe of the US mortgage meltdown that fueled the global financial crisis, with Goldman Sachs likely to face fresh embarrassment over its role, the Wall Street Journal reported Sunday.
The Senate Permanent Subcommittee on Investigations, whose high-profile inquiry commission subpoenaed Goldman's and other executives last year, is due to release its report on the subprime implosion of 2007 and 2008.
The paper, citing people familiar with the matter, said the report was expected to release emails from securities firms that developed or sold subprime mortgages and financial vehicles including collaterized debt obligations (CDO).
CDOs were used to help Wall Street firms bet against the housing market. When the housing bubble burst, several of the top CDOs were downgraded to "junk" status, and their values plunged.
Goldman, the Journal reported, created CDOs in 2006 and 2007 to shield its exposure to the US housing market, and has been accused of making large bets against the market while selling bullish positions to group that were not expecting the market to fall.
People familiar with the matter said Goldman and Deutsche Bank -- both of which have been criticized for misleading investors in the housing market -- were expected to draw particular scrutiny in the report, the Journal said.
In January, Goldman said it was renewing its commitment to the "primacy" of client interests, and laid out 39 recommendations stressing greater transparency in how the company does business, especially with regard to its own private trading and potential conflicts of interest.
The Journal said the Senate investigation's findings would likely expose bad blood between Goldman and Morgan Stanley, another Wall Street giant, over their roles in a deal involving a CDO called Hudson Mezzanine Funding 2006-1.
(Excerpt) Read more at news.yahoo.com ...
Goldman thought oil was going to hit $200 in 2008. So what?
and bet the mortgages would default
Again, so what?
while continuing to sell “bullish positions” to their clients the knew would likely crater.
Those 2 words don't go together.
As the market crashes they make money because of the short position.
Goldman lost money on ABACUS.
You're making this more complicated than it has to be.
The Cubs are playing Arizona tomorrow. If you make a bet with Goldman that the Cubs will win, are you going to be shocked that Goldman is "short" the Cubs? That Goldman hopes the Diamondbacks win?
Darn Goldman for creating that synthetic security and shorting the Cubs while allowing you to buy the Cubs.
I believe they will escape serious punishment as I said in 28, but they shouldn't.
Goldman Targeted by Investor Complaints of Naked Short-Selling
It’s eye opening, that is for sure. I do appreciate the link! Thanks very much!
It is different than betting on a ball game because they actually affect the game.
How do you imagine they effected this game?
I’ve been looking at some of your prior posts. You seem to like to hang out on financial threads. What do you do?
People need to go to jail over this. Hell, Goldman is part of the government now.
Yes they do, but they won't.
Merrill Lynch was neck deep in CDO’s. The reason they were forced to be bought out by BOA by the government was that they were playing with their own money in those investments and lost billions.
Big hint guys... we already know.
I was a loan officer for a community bank for 25 yrs. and was amazed that we were FORCED to lend to people who didn't qualify or we would be written up. The unqualified, of course, were minorities. I left the business in 2007 and retired.
Of course, we had our CRA officer ( at a salary of six figures)making sure that we lent to the masses.......what a complete fraud. Have never felt so good as when I retired. It always galls me when the banks get blamed for the meltdown. CRA was the catylst not the banks.
“This entire federal government should be disbanded and all authority except the Defense Dept. should be delegated to the states.”
AMEN! AMEN! AMEN! :)
Exactly. You can talk about Goldman all day long, but they were just doing what businesses are going to do ...the fact that we had a government meddling like we did, combined w/ zillions of illegals who were buying up the homes and you got what you got. Can’t pin it on any one entitity.
You know I’m in the Program!!!
I predict that the bribes received by Chris Dodd will not be mentioned in the report
... I meant it in jest, and I suspect you saw it the same way ... but I apologize anyway.
I agree. Goldman may be guilty of a lot of things but having won a bet is not one of them. They could have been wrong on the market and been buying the securities from their clients and the media would be excoriating them for reckless speculation.
George W. Bush's fault!
End of report.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.