Friday, December 14, 2007
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.