Friday, December 14, 2007

Goldman makes $11 billion shorting mortgage industry

The other day I wrote about a Washington Post story on how analysts missed the housing meltdown. One financial house, Goldman Sachs, however, actually made their biggest profit ever off of shorting the mortgage industry. A number of other brokerages bet against the housing bubble and won, too, according to the Wall Street Journal:
The subprime trading gains notched by Messrs. Birnbaum and Swenson and their Goldman associates are large by recent Wall Street standards. Traders at Deutsche Bank AG and Morgan Stanley also bet against the subprime-mortgage market this year, but in each case, their gains were essentially wiped out because their firms underestimated how far the markets would fall. New York hedge-fund company Paulson & Co. also turned a considerable profit on the subprime meltdown this year, as did Hayman Capital Partners, a Dallas-based hedge-fund firm, say people familiar with the matter.
So it wasn't all analysts who missed the subprime mess - only the stupid, biased or corrupt ones did.

1 comment:

Charlotte a disabled veteran said...

One has to ask why the subprime "mess" happened in the 1st place and it isn't just greed it's a totally lack of any moral obligation toward the society in which we live. A total "ME,ME,ME" attitude that seems to permeate every fiber of business in this country. It used to be that businesses felt some obligation toward their employees and customers, but that is no longer so. They don't even care if they "appear" moral as long as they get the almighty dollar. They along with the government (that rewarded the outsourcing of American jobs and the deregulation of every sector of business) and the American peoples (who seem to be able to vote for American Idol in droves but can't be bothered to vote for a moral president or other leaders) have shown a total lack of any obligation toward their country or society have killed our country. In the coming months I believe we will be seeing the total undoing of our economy and find that we have sold our children and grandchildren in slavery. There is going to be a depression, how bad will depend on if the rich and the government step up to the plate. But the easy days are gone. With the war draining our tax dollars (dollars which could have been put to better uses) and the governments total lack of understanding on how things are out here the American people are losing everything. You can't have an economy based on spending unless people are earning. And without jobs we can't earn. I see no triumph of philanthropy, conservative or otherwise. Sadly I see only really hard times.