Goldman said in its 2009 annual report that its short positions sought to offset its long positions in the mortgage market and did not generate large profits. Through 2006, Goldman "generally was long in exposure" in the mortgage-backed securities market, according to the report, and after taking losses on those securities in 2006 it reduced its exposure.
"AlthoughOf course they were a "bet against [your] clients," Goldman Sachs. You were making bets in which you won if the housing market crashed, and simultaneously peddling products to your clients in which you assured them that what you were selling were highly rated securities when they were, actually, steaming piles of dog shit. Now, I'm not saying that Goldman didn't get hit hard by the crash of the housing market -- otherwise they never would have needed to change their status from investment bank to bank holding company in order to gain access to the Fed borrowing window. held various positions in residential mortgage-related products in 2007, our short positions were not 'a bet against our clients,'" according to the report.
However, even the earlier assertions by their top executives that government funds were never needed to maintain solvency of the firm pale in comparison to their denial of betting "against our clients." Now, they have crossed the line between unbridled arrogance and a living satire. Note, I am not making a value judgment on shorting the market while simultaneously recommending their clients to go long -- when the sole pursuit of business is the realization of profit, Goldman was behaving as we should expect a successful firm to behave. The absurdity is the lengths to which they go to try and deny that they make such a savvy business decision in order to try and maintain at least a facade of legitimacy in the eyes of the public, the veneer of which has long since been stripped.
Perhaps the reason that such things are never stated outright even goes deeper, to the heart of our current system of state-sponsored corporatism or corporate statism, depending upon your point of view. Perhaps acknowledging the savvy business sense of Goldman's action coupled with the naked immorality of that decision would make too many people question just what kind of values lay at the heart of our FIRE (Finance, Insurance, Real Estate) economy. Then, they might actually ask if those values aligned with the kind of values we want reflected in our families, communities, and society....
If you're a top Goldman exec or other member of the financial services elite, you can't have the "rabble" asking such questions. Otherwise, they might just wise up and ask what they need an industry based upon predatory, bloodsucking behavior for -- especially when they increasingly seem as if their success is built on the back of making life more difficult for a growing proportion of the populace.