Greed, Lies and MBS: “There’s No Question Goldman Did Exactly What Sen. Levin Said,” Cohan Says
By Aaron Task | Daily Ticker – 1 hour 8 minutes ago
Goldman Sachs has a lot of friends in high places, including many former Goldman execs. But the company has also made a few enemies along the way to becoming arguably the most powerful firm on Wall Street, including the Chairman and Ranking Republican on the Senate Permanent Subcommittee on Investigations.
"In my judgment, Goldman clearly misled their clients and they misled the Congress," Sen. Carl Levin (D-MI) said yesterday as he and Sen. Tom Coburn (R-OK.) released a two-year study on the financial crisis and its cause.
Generally speaking, Sen. Levin has accused Goldman of selling clients mortgage-backed securities (MBS) while at the same time holding a "huge short" position in the MBS market in 2007. "They gained at the expense of their clients, and they used abusive practices to do it," he said.
In a statement, Goldman denied any wrongdoing; still, its shares were down 2.4% in recent trading vs. a 0.8% decline for its peer group, as measured by the Financial Select SPDR (XLF).
In the accompanying video, Dan and I discuss the fallout from Sen. Levin's report with William Cohan, author of Money and Power: How Goldman Sachs Came to Rule the World.
"Based on my investigation...there's no question Goldman did exactly what Levin said: bet against the mortgage market at the same time it continued to sell mortgage-backed securities," Cohan says. "It sure looks wrong to me. If what they did is not against the law, it should be against the law."
finance.yahoo.com |
