What Internal Goldman Sachs Emails Reveal
Democrats have released top banker emails in their push for reform
.Emails exchanged between executives at Goldman Sachs, the massive Wall Street bank currently under federal investigation, show bankers crowing over their financial successes from betting against the housing market. Congressional Democrats and critics of the bank say the emails prove the bank was working against the best interests of the U.S. economy, which is still recovering from the housing collapse. The Democrats also argue that the emails prove that Goldman Sachs anticipated the crash and made a large profit from it, which the bank denies. However, some observers are defending the emails, saying they reveal nothing illegal and that the popular demonization of Wall Street has gone too far.
- Goldman Controversies Aiding Reform New York Daily News' Helen Kennedy explains, "Republicans trying to put the brakes on new regulation were rocked back onto the defensive last week when the SEC launched a broad fraud probe of Goldman Sachs, renewing public anger against the fat cats who put the economy in the toilet. Goldman, the respected blue-chip name that came through the economic crisis richer than ever, allegedly saw the collapse coming and made massive bets against a real estate fund they were hawking to investors as safe - but which was really designed to fail."
- Larry Summers: Need for Transparency Top White House economic adviser Larry Summers said on Face The Nation on Sunday, "This underscores what is at the center of the president's vision here: the importance of transparency, the importance of things being in the open, the importance of it being known who is in a position to benefit from what." Summers said Congress should pass financial regulatory reform to bring greater transparency to Wall Street.
- Dems Use Emails to Push Financial Reform Bloomberg News' Michael Moore and Joshua Gallu write, "White House officials and Democratic lawmakers seized on internal e-mails from Goldman Sachs Group Inc. to push for curbs including a ban on proprietary trading as they brace for a Senate showdown on Wall Street oversight." The Senate holds a key test vote on the legislation tonight. "Democratic Senator Christopher Dodd, chairman of the Senate Banking Committee, and Senator Sherrod Brown, also a Democrat on the panel, said yesterday the e-mails help show why rules such as the Volcker rule are needed."
- Why This Isn't a Scandal Mother Jones' Kevin Drum sighs, "You know, I'm as willing as the next guy to rubbish Goldman Sachs." However, "There are plenty of things to hate about Goldman Sachs, but this one is a real stretch. Maybe I'm missing something, but I don't really see any kind of serious deception here." He explains, "they lost a truckoad of money on mortgage products and made a truckload of money shorting mortgage products. Apparently the second truckload was bigger than the first during certain periods, but that's all. As far as I can tell, this has been Goldman's story all along."
- Goldman Is Too Demonized Reuters' Felix Salmon urges restraint. "Let’s not demonize Goldman Sachs for shorting mortgages, or for making money doing so, especially since it isn’t true: while the Goldman mortgage desk did make $476 million in 2007, it lost $1.686 billion in 2008. That’s less than its competitors lost, but it’s still a lot of money." He writes, "I’ve consistently defended Goldman against populist charges that simply shorting mortgages, or hedging long mortgage positions, is inherently evil."