
Goldman’s big e-problem
Lawmakers and White House officials yesterday used a raft of e-mails showing Goldman Sachs executives basking in the subprime mortgage crisis as an opportunity to pile on the gold-plated bank and make the case for financial regulatory reform.
“We’ve got to end once and for all the casino atmosphere of Wall Street where they’re gambling, basically, on synthetic ideas,” said Richard Shelby (R-Ala.), the ranking member of the Senate Banking Committee, on NBC’s “Meet the Press.”
Added Ohio Democratic Sen. Sherrod Brown on ABC’s “This Week”: “These e-mails signify that there are all kinds of conflicts of interest on Wall Street.”
Over the weekend, the Senate Subcommittee on Permanent Investigations released selected e-mails showing Goldman execs celebrating their making money by shorting the collapsing mortgage market.
In one e-mail, Goldman CEO Lloyd Blankfein said, “Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of the shorts.”
The correspondences among Goldman execs prompted Austan Goolsbee, one of President Obama’s economic advisers, to remark on “This Week,” “The CEO of Goldman is not going to win any popularity contests when, over a period that ordinary Americans’ pensions, houses, etc., were collapsing in value, they were actually making significant money off of it.”
The e-mails come a week after the Securities and Exchange Commission filed charges against Goldman and Goldman Vice President Fabrice Tourre charging them with misleading investors by hiding that billionaire hedge fund titan John Paulson had a role in putting together a collateralized debt obligation that Paulson bet against.
Goldman has maintained that, contrary to popular belief, it did not make loads of cash from the subprime crisis, and claims to have lost $100 million-plus from the CDO involved in the SEC case. The bank also over the weekend released e-mails from Tourre in which he admits the CDO he helped create had turned against him.

