April 12, 2016
NO BUBBLE, JUST FRAUD:
Goldman Sachs Admits It Defrauded Investors, Pays $5 Billion Fine (Eric Levitz, 4/11/16, NY Mag)In April 2006, Goldman Sachs provided investors with a bullish report on Countrywide's high-quality mortgage loans -- loans the bank had helpfully packaged into AAA-rated mortgage-backed securities, thereby offering those lucky clients a low-risk way of profiting from America's housing boom. When the bank's head of "due diligence" saw the report, he typed a short email to his colleagues: "If only they knew..."
Now we know. On Monday, the bank completed a $5.1 billion settlement with state and local authorities for its role in perpetuating the subprime-mortgage crisis. Goldman is the last of the major banks to pay for its financial-crisis sins, but unlike some of its peers, the firm has agreed to formally acknowledge its malfeasance.
Posted by Orrin Judd at April 12, 2016 4:19 AM