Goldman Sachs gloated as market crashed

The fallout from the Goldman Sachs continues with the release of emails showing how Goldman Sachs executives were bragging that the subprime crisis was a chance to make some "serious money". While people were losing their jobs and homes, these people were gloating.

As reported here, the emails tell us a lot about the culture of the place. While America was imploding and millions were losing their jobs, Goldman Sachs was cashing in. ""Sounds like we will make some serious money," said Goldman Sachs executive Donald Mullen in one series of emails from October 2007 when the market was starting to fall self-destruct.

Now, the collateralized debt obligation known as ABACUS 2007-AC1 at the centre of the lawsuit against Goldman Sachs might not be illegal. But the bottom line is that people lost their houses and jobs and Goldman Sachs was making money out of it. Not only that, their traders were congratulating each other about it.

The most disgusting ones are contained in this report from the Washington Post where Goldman Sachs honcho Fabrice "Fabulous Fab" Tourre sends an email to his girlfriend saying he knew he was creating risky securities unlikely to succeed. "Not feeling too guilty about this, the real purpose of my job is to make capital markets more efficient . . . amazing how good I am in amazing how good I am in convincing myself!!!".

The New York Times says the emails seem to contradict claims by Goldman creating the impression that the firm actually lost money on mortgage-related investments. That might damage its case.

Still, even if Goldman beats the SEC charges, these sorts of revelations will damage the brand, perhaps permanently.


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