Carl Levin is asking the same silly question that I've heard over and over: shouldn't Goldman have told buyers that it was short?
The presumption is that Goldman has some sort of godlike knowledge that it was concealing from its customers. It's not Goldman's responsibility to tell its customers what they should want to buy (or at least, not on the trading/ABS side), or what Goldman wants to buy. It's Goldman's responsibility to make sure that its clients have all the relevant details about the securities. Clients buy stuff from Goldman all the time that some part of Goldman is short; differences of opinion are what make marriages and markets.
It is true that clients would like to know what Goldman is doing, but it's also true that the seller of the house I just bid on would like to know what my reservation price is. That doesn't mean that I have some obligation to disclose this information. These are large securities firms that are presumed to know how to evaluate a security; if they can't, they should turn in their charter and disband.
Goldman was making a bet. That bet could have gone wrong (not in this case, but in many similar). Other firms had different opinions of the market. Goldman was under no obligation to disabuse them of their opinions. They're not investment advisers; they're securities issuers.
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