Washington Babylon — November 2, 2009, 9:09 am

Goldman Sachs: The casino always wins

From Greg Gordon at McClatchy :

In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman’s sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation’s premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman’s failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws.

Share
Single Page

More from Ken Silverstein:

Commentary November 17, 2015, 6:41 pm

Shaky Foundations

The Clintons’ so-called charitable enterprise has served as a vehicle to launder money and to enrich family friends.

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

April 2017

You Can Run …

= Subscribers only.
Sign in here.
Subscribe here.

Never Would I Ever

= Subscribers only.
Sign in here.
Subscribe here.

The March on Everywhere

= Subscribers only.
Sign in here.
Subscribe here.

Defender of the Community

= Subscribers only.
Sign in here.
Subscribe here.

Echt Deutsch

= Subscribers only.
Sign in here.
Subscribe here.

The Boy Without a Country

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
The March on Everywhere·

= Subscribers only.
Sign in here.
Subscribe here.

Photograph (detail) © Nima Taradji/Polaris
Post
The Forty-Fifth President·

= Subscribers only.
Sign in here.
Subscribe here.

Photograph (detail) by Philip Montgomery
Article
Defender of the Community·

= Subscribers only.
Sign in here.
Subscribe here.

Illustration (detail) by Katherine Streeter
Article
The Boy Without a Country·

= Subscribers only.
Sign in here.
Subscribe here.

Illustration (detail) by Shonagh Rae
Article
Asphalt Gardens·

= Subscribers only.
Sign in here.
Subscribe here.

In a city that is rapidly pricing out the poor, NYCHA’s housing projects are a last bastion of affordable shelter, with an average monthly rent of $509
Photograph (detail) © Samuel James

Number of mine-detecting monkeys erroneously reported to have been given to the United States by Morocco in March:

2,000

The Pacific trade winds are weakening as a result of global warming.

In the United States, legislation to repeal the Affordable Care Act was advanced by the House Ways and Means Committee after 18 hours of deliberation, during which time the Republican members of Congress passed around candy.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Who Goes Nazi?

= Subscribers only.
Sign in here.
Subscribe here.

By

"It is an interesting and somewhat macabre parlor game to play at a large gathering of one’s acquaintances: to speculate who in a showdown would go Nazi. By now, I think I know. I have gone through the experience many times—in Germany, in Austria, and in France. I have come to know the types: the born Nazis, the Nazis whom democracy itself has created, the certain-to-be fellow-travelers. And I also know those who never, under any conceivable circumstances, would become Nazis."

Subscribe Today