Critics have long charged that Goldman Sachs profited by betting against the housing bubble after playing a key role in inflating it. For its part, the bank has maintained that all bets against housing were just hedges to prevent devastating losses. But newly released documents suggest that Goldman Sachs' senior employees were, in fact, profit-minded about the housing crash. "Sounds like we will make some serious money," executive Donald Mullen boasted in an e-mail as the credit rating of mortgage securities was downgraded. CEO Lloyd Blankfein noted that the firm was making far more than they were losing in the crash. But what do the e-mails prove? (Watch a CBS report about Goldman Sachs' discovered emails)
This does not prove wrongdoing: These e-mails are no smoking gun, says Felix Salmon in Reuters. They just show "Goldman people going about their line of work, doing what Goldman people do." Betting against a risky market is a sensible move. The "populist charges" that doing so is "inherently evil" are just plain wrong.
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