Sunday, 25 April 2010

How many more Goldman e-mail leaks are there to come?

The only thing to add to this piece from the Observer newspaper is that while many who have taken the time to read around the story will not find this at all shocking, those who are only casually acquainted with Goldman's antics will find this repugnant

The beleaguered Wall Street bank Goldman Sachs boasted that it was making tens of millions of dollars of profits daily by betting against its own clients' investments, according to internal emails released yesterday by a US senator.

The annual report of the bank, which is currently facing fraud charges in the US, denied that it had generated enormous revenues by wagering on the US housing crisis. Yet an email apparently from chief executive Lloyd Blankfein to his colleagues says: "Of course we didn't dodge the mortgage mess. We lost money, then we made more than we lost because of 'shorts' [bets that the market would get even worse]."

The damning material from the senate's permanent subcommittee on investigations, which is reviewing the role of Wall Street banks in the financial crisis, was posted on the website of its chairman, Senator Carl Levin. It will be used in what promises to be an incendiary public hearing on Tuesday when Blankfein is scheduled to testify in front of the subcommittee.

In a statement, Goldman stood by earlier claims that it never made significant profits out of the housing market and said that the emails proved nothing.

To add to the potential fallout for the bank the UK's FSA are getting in on the act as well according to this article from Sky's website. Sky's City Editor opines as follows:

"If the knives were out for Goldman Sachs before today, they're now hovering perilously close to the Wall Street bank's throat - and Adair Turner, chairman of the Financial Services Authority, is likely to be paying particularly close interest."

Also cited in the article are comments from Lucas van Praag, the spin doctor for Goldman Sachs, who is quoted as saying that the Senate panel had "cherry-picked" the most negative e-mails from millions submitted. Question is of course, to change the metaphor slightly, have all of the "rotten apple" e-mails been revealed yet?

As commented here before the leaking of such documents is not helpful to the public persona of Goldman, but unless the SEC and US senators have more damning evidence against the firm the antipathy towards the firm is likely to recede in the public imagination as the media spotlight moves back to more important issues involving the sex lives of celebrities and the Punch and Judy show of daily politics.

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