Goldman Sachs Emails: Firm Had 'The Big Short' As Economy Fell
As homeowners were falling behind on their subprime mortgages, wreaking havoc for investors that owned slices of their mortgages in securities peddled by Wall Street, Goldman Sachs was "well positioned," according to internal company emails by top executives.
The firm had "the big short," declared chief financial officer David Viniar -- Goldman Sachs was making money off the souring of the very securities they had peddled to the market.
The internal emails released Saturday by the Senate Permanent Subcommittee on Investigations paint a picture long known by most of the country, yet never before so vividly and explicitly articulated by Goldman officials. (Scroll down to see the full text of the emails.) As early as May 2007, as homeowners were being crushed under the weight of subprime mortgages, the most profitable firm on Wall Street had long taken out a form of insurance on those delinquencies.
The firm made money on the upside -- originating, securitizing and selling subprime mortgage-based securities to investors -- and on the downside, thanks to the insurance.
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http://www.huffingtonpost.com/2010/04/24/goldman-sachs-emails-big-short_n_550547.html