**Goldman Sachs executives boasted about the money the bank was making while the US housing market was collapsing in 2007, released company emails show.**The emails detail how the investment house profited from the mortgage crisis by betting that the market would fall.
US senator Carl Levin said banks like Goldman were “self-interested promoters of risky schemes that helped trigger the financial crisis”.
The bank says that it lost money in the market crash.
It says it lost $1.2bn (£780m) in the residential mortgage market during 2007-08.
Separately, the bank is also defending itself against a government lawsuit which accuses it of misleading investors.
‘Like Frankenstein’
The emails were released by the Senate Permanent Subcommittee on Investigation into the origins of the financial crisis ahead of a hearing on Tuesday.
In one of them, Goldman Sachs executive Donald Mullen wrote to his colleague: “Sounds like we will make serious money.”
In another email, a Goldman trader stated that the investments he had sold were “like Frankenstein turning against his own inventor”.
“I’m trading a product which a month ago was worth $100 and today is only worth $93. That doesn’t seem like a lot but when you take into account… (the investments) are worth billions, well it adds up to a lot of money”, wrote Fabrice Tourre.
At the time the bank bought and sold housing investments betting the market would go down - a process known as short selling.
“Of course we didn’t dodge the mortgage mess, we lost money, then made more than we lost because of shorts,” Goldman Chief Executive Lloyd Blanfein wrote in an email in 2007 also released by the Senate subcommittee.
‘Cherry-picked’
The emails were among some 20 millions documents provided to the Senate subcommittee chaired by Mr Levin.
He said they showed that Goldman “made a lot of money by betting against the mortgage market”.
Other critics say that the bets added fuel to the financial crisis.
But Goldman Sachs spokesman Lucas van Praag said Senator Levin’s subcommittee had “cherry-picked just four emails from almost 20 million pages of documents and emails provided to it by Goldman Sacks”.
“It is concerning that the subcommittee seems to have reached its conclusion even before holding a hearing,” the spokesman added.This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.
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