Saturday, April 24, 2010

Here's the Serious Situation that Could Blow Goldman Sachs Out of the Water

While the SEC continues to pursue a highly questionable fraud charge against Goldman Sachs, new information suggests that a serious violation may have occurred that could cost the chairman and chief executive of Goldman Sachs, Lloyd Blankfein, his job and that of the President and COO, Gary Cohn, and severely damage the firm.

In Goldman's 2009 annual report to investors, Blankfein and Cohn said that Goldman “did not generate enormous net revenues or profits by betting against residental related products."

However, in an email just released by the Senate Subcommittee Investigating the Financial Crisis,  Blankfein, , wrote in November 2007: “Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts.”

In other emails released, Goldman's CFO David Viniar responded to an email that Goldman had made $50 million in one day by taking short positions : “Tells you what might be happening to people who don’t have the big short..."

In another released email, a Goldman employee wrote in response to news of a decline in some mortgage backed securities that Goldman was short, “Sounds like we will make some serious money.”

“Yes we are well positioned,” another responded.

Thus, it's clear, Goldman did make money shorting mortgage backed securities.The size of net profits is not clear, but the size of net profits  becomes critical.

It is a situation where size matters, thanks to Blankfein's and Levin's claim in the annual report that net-profits were not enormous.

The "big swinging dicks" of Wall Street better hope that the size of the net profit they made from short selling mortgage backed securities was tiny. If the net profit is anywhere close to as big as they think their dicks are, they are in serious trouble for reporting false information in their annual report.


Here are the emails released by the Senate Subcommittee . They are fascinating reading.


  1. The only way to stop these bastards is to start shooting them. Drive by their headquarters with a fully functional guillotine on the back of a flat bed Ford. This should get their attention

  2. Um, the 2009 annual report deals with what transpired in... (hold onto your hat!) 2009. What exactly is the significance of e-mails re what happened in 2007??

  3. These 'big swinging dicks' should be swinging from lamp posts and left there to rot as a warning to the other dicks.

  4. @tosk59

    Actually, the 2009 annual report shareholder letter specifically references 2007 and 2008, read it for yourself, I provide the link in the original post.

  5. An “octopus wrapped around the face of humanity” as one journalist put it; the New World Banking Order has arrived. In 2009 speculative, uncontrolled derivatives were the Worlds largest market at an estimated 600 Trillion. The Worlds total economic output was an estimated 58.07 Trillion and the total World bond market was an estimated 82.2 Trillion. Yet, there is no “crime” that the bankers can be charged with as they bankrupt citizens and Nations into the New World Order?
    The appropriate criminal charge should be Treason to the American People and our Democratic Republic and Constitution. The members of the Trilateral Commission and the Bilderberg Group in government and banking who conspired to overthrow our soverenity as an independent nation, who conspired to bankrupt our Treasury with three unjust Wars and multinational corporate “rolling” bailouts, conspired to control mass media “free Press” propaganda, conspired and manipulated “financial crisis” for their own gain, conspired to “relocate” American industry and technology, conspired to offshore “American Income Tax”, and who have conspired to enslave American citizens with National debt (about $64,000 per citizen) and personal debt. Deserve the death sentence by firing squad for Treason.
    Obama, your New World Order is Totalitarian and we Patriots, American free citizens, will fight for our Democracy, Independence and Freedom.

  6. windcatcher said it all.