Over the weekend, a Senate Committee headed by Carl Levin released dozens of 4 private Goldman Sachs e-mails. (UPDATE: Dozens more were voluntarily released by Goldman.) They show the computer chatter among Goldman’s top brass, and top mortgage market players during mid-2007, which is the time the housing market was going from not-so-great to horrible. There are e-mails to and from all the stars here of what is becoming the Goldman credit crunch scandal–CEO Blankfein, COO Gary Cohn, CFO David Viniar, the since-departed Jon Winkelried, head of mortgage trading at the time Daniel Sparks, and of course the Fabulous Fab. There is no smoking gun here, and I agree with Felix Salmon that just because the firm bet against mortgages doesn’t mean it broke the law. (Client’s trust is another matter.)
let’s not demonize Goldman Sachs for shorting mortgages, or for making money doing so, especially since it isn’t true: while the Goldman mortgage desk did make $476 million in 2007, it lost $1.686 billion in 2008. That’s less than its competitors lost, but it’s still a lot of money.
But the e-mails do shed some more light on Goldman and the SEC case against it. Here’s what I learned:
