Archive for December 20th, 2007
“Do you ever pray for the senators, Dr. Hale?” “No, I look at the senators and I pray for the country.”
— Edward Everett Hale, New England Indian Summer [1940]
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Draw your own conclusions.
That winner was the powerful investment bank Goldman Sachs, whose former chairmen include the current Secretary of the Treasury, the governor of New Jersey, and the Treasury Secretary under President Clinton. According to the Wall Street Journal, late in 2006, traders in its Structured Products department convinced bank executives that the “sub-prime market was heading for trouble.”
What did Goldman do? It sold off much of its “stockpile” of mortgage-backed securities. In addition, the bank’s traders bet—what is called “selling short”—that the market would go down.
This paid off handsomely: The bank generated “nearly $4 billion of profits during the [fiscal] year ended Nov. 30,” easily erasing mortgage-related losses in the rest of the firm.
Read it all: Townhall.com::Selling Morality Short::By Chuck Colson
