Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, December 14, 2007

Goldman Profits on Mortgage Mess

When all other investment banks are reporting big losses because of subprime mortgages, Goldman Sachs is expected to report record net annual income of more than $11 billion.  A good share of those profits comes because its proprietary traders bet that the subprime mortgage market would collapse.  This presents the question -- why did Goldman continue to sell CDOs to its customers, when its own traders were betting they would fall?  WSJ, How Goldman Won Big On Mortgage Meltdown.

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