Goldman Sachs CEO admits to improper behavior
Goldman Sachs' chief acknowledged Wednesday that the investment bank engaged in "improper" behavior in 2006 and 2007 when it made huge bets on a housing downturn while peddling as safe more than $40 billion in securities backed by risky U.S. home loans.
Lloyd Blankfein is just admitting the obvious, but actually admitting it at all is a surprise. I would guess that the Sach's guys have realized the problem is too big and too obvious to sweep under a rug, so some preemptive admission of regret, but not legal liability, is a good idea.
The part he was admitting was improper was Goldman Sachs selling housing bundles as triple A rated securities, while at the same time taking out massive bets (with AIG) that those securities would fail.
This was at the Financial Crisis Inquiry Commission, Congress's investigation into the finance crisis. So there is quite a bit of blame to spread around here.
Jay