Seeking Alpha

Lloyd Blankfein insisted before Congress last year that Goldman Sachs (GS) "didn’t have a...

Lloyd Blankfein insisted before Congress last year that Goldman Sachs (GS) "didn’t have a massive short against the housing market." But whether it was lucky or good, the bank made $500M from that short. For Goldman to suggest otherwise - as it has  - is "almost silly," Andrew Ross Sorkin writes. "Goldman should be proud of its prescient call about housing."
Comments (4)
  • neutrinoman
    , contributor
    Comments (700) | Send Message
    Yes, they should be proud of it, and they did nothing illegal in shorting the mortgage market.


    The real question is this: why was a major investment bank not investing in productive things, but instead wasting their talented employees on speculative bets and counterbets?


    As far as Congress goes, it's a joke: Congress is responsible, along with the Fed, for the giant credit-housing bubble that Goldman played a role in. They have no business lecturing anyone about any of this stuff. They just need to be replaced.
    19 Apr 2011, 05:48 PM Reply Like
  • tigersam
    , contributor
    Comments (1711) | Send Message
    Why Goldman should care about government? It is not a government firm and they can go long or short based on their research.
    19 Apr 2011, 06:00 PM Reply Like
  • stocksniper31
    , contributor
    Comments (46) | Send Message
    The issue at hand is not that they made money on shorting the CDO's but that they were allowing certain customers to pick the mortgages that went into them without disclosing this to the buyer. Also their relationships/influence with the rating agency is another major problem...the investment banks paid fees to moody's etc. and pressured them to stamp the CDO's triple A...that is the side of the case that people need to focus on. Did they know it wasn't AAA and still sold it to clients for themselves and the hedge funds that picked the mortgages
    19 Apr 2011, 06:01 PM Reply Like
  • superpatrol
    , contributor
    Comments (616) | Send Message
    even lehman made 500M+ on shorting subprime related assets.... the problem was they were stuck long with more than 50B of similar assets, lol
    19 Apr 2011, 08:30 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio: