Today is a huge day for finance nerds: it's as if a very famous wrestler were stepping into a cage with another very famous wrestler (sorry, I'm not a wrestling nerd). Anyway, this afternoon Goldman Sachs's top executives will appear before the Senate subcommittee that's trying to determine why, exactly, the econopocalypse happened.
But Goldman Sachs finds it awfully interesting that they're being called before this particular Senate panel less than two weeks after the Securities and Exchange Commission filed charges accusing the bank of defrauding investors by selling them a CDO investment called Abacus 2007-Ac1, even as the hedge fund that built Abacus out of crappy, overleveraged housing loans bet against it.
What did the Senate know and when did they know it? Is this whole thing a conspiracy to make Goldman Sachs take the fall for everything that's happened? Lloyd Blankfein seems to think so…
In prepared testimony, Blankfein reiterated that his firm was simply trying to balance its mortgage investments and did not bet heavily against the housing market — known as shorting — or against the interests of its clients.
"We didn't have a massive short against the housing market and we certainly did not bet against our clients," Blankfein said, adding that Goldman lost $1.2 billion on housing investments in 2007 and 2008.
See? They lost $1.2 billion of their own money. What more evidence do we need that Goldman isn't at fault for the mortgage crisis? It's like if you shot yourself in the foot while attempting an armed robbery. That doesn't make you a perp.
That makes you the victim.
Tags: Banks, Economy, Goldman Sachs, Lloyd Blankfein, Money, Senate