The beleaguered Wall Street bank Goldman Sachs boasted that it was making tens of millions of dollars of profits daily by betting against its own clients' investments, according to internal emails released yesterday by a US senator.
The annual report of the bank, which is currently facing fraud charges in the US, denied that it had generated enormous revenues by wagering on the US housing crisis. Yet an email apparently from chief executive Lloyd Blankfein to his colleagues says: "Of course we didn't dodge the mortgage mess. We lost money, then we made more than we lost because of 'shorts' [bets that the market would get even worse]."
The damning material from the senate's permanent subcommittee on investigations, which is reviewing the role of Wall Street banks in the financial crisis, was posted on the website of its chairman, Senator Carl Levin. It will be used in what promises to be an incendiary public hearing on Tuesday when Blankfein is scheduled to testify in front of the subcommittee.
In a statement, Goldman stood by earlier claims that it never made significant profits out of the housing market and said that the emails proved nothing.