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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (361659)	4/28/2010 6:40:15 AM
From: Elroy	Read Replies (1) \| Respond to of 794348

In 2007, total net revenues from residential mortgage-related products, both longs and shorts together, were less than $500 million Does anyone know what they mean by 'revenue from mortgage related products'? Is Goldman's revenue from a mortgage backed security a) their commission - for putting buyers and sellers together, ie, just the brokerage part of a trade b) their trading profit - for buying a mortage security low and selling it high, or shorting it and buying it back, c) their commission for generating a new mortgage security (like an IPO commission) d) some combination of the above?

To: LindyBill who wrote (361659)	4/28/2010 3:11:12 PM
From: KLP	3 Recommendations Read Replies (1) \| Respond to of 794348

The best one paragraph description of the Bubble Mess I've ever seen...! Thanks John@Powerline: 3) Today's inquisition was a sideshow. Here is what really happened: there was a bubble in housing prices. The bubble was mostly the result of government policy--loose money, combined with pressure on banks to make bad loans to unqualified home buyers. It all worked for a while because Fannie Mae and Freddy Mac, under the leadership of Congressman Barney Frank and others, created a secondary market for shaky mortgages. Goldman Sachs participated in this market, downstream, along with many other players. But the whole thing wasn't an accident or a conspiracy, it was government policy. The home price bubble could have only one possible result. All bubbles burst--there is nothing else they can do--and the bursting of a bubble is always painful. The whole disaster that began in 2008 was the inevitable result of government policy, which is why Senators are so anxious to pass the buck to Goldman Sachs.