Low Road to High Finance – Goldman Sachs Sold Off Billions

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Democracy Now!
Nov. 4, 2009

Low Road to High Finance: McClatchy Expose Reveals How Goldman Sachs Sold Off Billions in Mortgage Securities After Anticipating Housing Collapse

A five-month investigation by McClatchy Newspapers has revealed that Goldman Sachs made secret bets against the housing market while simultaneously selling off billions in soon-to-be worthless securities. In 2006 and 2007, the bank reportedly peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in US housing prices would send the value of those securities plummeting. We speak to McClatchy reporter Greg Gordon. [includes rush transcript]

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Goldman taking away people’s homes

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In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers that it also was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Now, a five- month McClatchy investigation has found that Goldman’s failure to disclose those secret bets may have violated securities laws.

How Goldman secretly bet on the U.S. housing crash

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By Greg Gordon
McClatchy Newspapers
November 1, 2009

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman’s sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation’s premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

[…]

via How Goldman secretly bet on the U.S. housing crash | McClatchy

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Interview with Greg Gordon

TheRealNews

How Goldman secretly bet on the U.S. housing crash

see

Part 2: Goldman taking away people’s homes

Goldman left investors holding its subprime bag (Part 3)

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