Goldman Sachs Hearings: LIVE UPDATES, VIDEO

Goldman Sachs CEO Lloyd Blankfein is testifying this morning in front of the Senate Permanent Subcommittee on Investigations, which alleges the company's executives misled investors with toxic mortgage securities, earning billions at the expense of their clients. The panel, lead by Senator Carl Levin, points to internal emails that suggest the company knowingly shorted the housing market throughout the year.

The Securities and Exchange Commission filed suit against the bank this month, saying Goldman neglected to tell buyers that investments were put together by a hedge fund client, Paulson & Co., which was betting on the investments to fail.

"We didn't have a massive short against the housing market, and we certainly did not bet against our clients," Blankfein said. "Rather, we believe that we managed our risk as our shareholders and our regulators would expect." In addition to Blankfein, CFO David Viniar, Michael Swenson, Craig Broderick, Daniel Sparks, Joshua Birnbaum and Fabrice Tourre are testifying.

Scroll through the slideshow for the latest hearing updates.

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The "Shitty Deal" Repeated Over And Over

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Chairman Carl Levin, to the delight of the crowd, continually repeated a descriptive, colorful word typically left out of family newspapers that was used by a top Goldman executive to describe a deal it made for clients. The security, named Timberwolf I, a collateralized debt obligation of other collateralized debt obligations that were based not on actual home mortgage bonds but instead on those bonds' movements, was referenced in a June 22, 2007, email from a Goldman senior executive, Tom Montag, to another, Dan Sparks. Sparks is testifying today before Levin's panel. In his email, Montag remarked of the Timberwolf I deal, "[B]oy, that timeberwof [sic] was one shitty deal." Levin used the word "shitty" 11 times -- eliciting multiple rounds of quiet giggles -- in questioning Dan Sparks, the former head of Goldman's mortgage department, about why Montag would describe it as "shitty," how long they had known it was "shitty," and whether they knew the deal was "shitty" when they peddled it to clients. "Our clients' interests always come first," Goldman says on its website. That security was rated less than three months prior to Montag's email. It lost 80 percent of its value within five months of issuance. Sparks and Montag have since left the firm. Levin grew exasperated with Sparks' non-answers: "I don't think you want to answer." The next panel member to ask questions, Susan Collins (R-Me.) also grew frustrated, saying that she was already getting tired of Sparks' evasiveness after 30 seconds. -- Shahien Nasiripour

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Chairman Carl Levin, to the delight of the crowd, continually repeated a descriptive, colorful word typically left out of family newspapers that was used by a top Goldman executive to describe a deal it made for clients.

The security, named Timberwolf I, a collateralized debt obligation of other collateralized debt obligations that were based not on actual home mortgage bonds but instead on those bonds' movements, was referenced in a June 22, 2007, email from a Goldman senior executive, Tom Montag, to another, Dan Sparks. Sparks is testifying today before Levin's panel.

In his email, Montag remarked of the Timberwolf I deal, "[B]oy, that timeberwof [sic] was one shitty deal."

Levin used the word "shitty" 11 times -- eliciting multiple rounds of quiet giggles -- in questioning Dan Sparks, the former head of Goldman's mortgage department, about why Montag would describe it as "shitty," how long they had known it was "shitty," and whether they knew the deal was "shitty" when they peddled it to clients.

"Our clients' interests always come first," Goldman says on its website.

That security was rated less than three months prior to Montag's email. It lost 80 percent of its value within five months of issuance. Sparks and Montag have since left the firm.

Levin grew exasperated with Sparks' non-answers: "I don't think you want to answer."

The next panel member to ask questions, Susan Collins (R-Me.) also grew frustrated, saying that she was already getting tired of Sparks' evasiveness after 30 seconds. -- Shahien Nasiripour

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MissVirginiaVoter said on 27 Tuesday 2010 pm30 7:12 pm: My credit score is 580, I pay Equifax to tell my banker that it's really 780. This is what Goldman Sachs did.

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You can read the first panel's prepared remarks to the committee here.

Comments

[Amir Alexander Folkestad]

04:59 PM on 05/08/2010

hjhg

[apefool]

07:17 PM on 04/30/2010

I wonder if this was as harsh as the Oliver North hearings?
and who's next, can't wait to see

[kenstrolle]

05:46 AM on 04/30/2010

Go Carl Go!!! Was there any regulaters, have they been fired? Or did bush just get rid of all regulation. I like to know how much lobbist money was spent to make this happen, and who it went to! The republians are showing once again that they don't care about the american people.
unless they ar rich!!!!

[DazedandConfused]

08:35 PM on 04/29/2010

I wished the Senate subcommittee had followed up on Blankfein's comment about GS being a "market maker" and providing investors with the level of risk that they wanted. Because this was complete BS. A LOT of these CDO's (and synthetic CDO's) were AAA-rated. This means that the investors were NOT seeking risk / risky investments. In fact, a lot of pensions plans, government agencies cannot buy risky investments (i.e., they have to buy AAA-rated securities -- it's why GS was negotiating so heavily with the rating agencies). Blankfein acted like the securities provided return conmensurate with the level of risk. NO WAY. In fact, one of Fabulour Fab's more interesting musings had to do with the fact that no one had any idea how to appropriate price this stuff. (Models? When LTCM had to be bailed out due to their models, Wall Street should have really chucked them all.

[ElleBelleBlue]

03:29 PM on 04/29/2010

http://www.baitandswitchtv.com/index.php?option=com_content&view=article&id=79&Itemid=67&epi=2&frame=shittyshittybankbank

[Senseimilla]

05:14 AM on 04/29/2010

I'm sorry, but did you all EXPECT Wall Street Executives to be bleeding-heart Jesus sheepherders?

NO. You shouldn't have. But you still will.

[MacBernac]

08:33 PM on 04/28/2010

Goldman Sachs is a malignancy. A cancer. A poisonous, toxic spill on the American economy and the American working people. It should be excised, exterminated, annihilated before it metastasizes. I hope it's not too late.

[Winston120]

04:50 PM on 04/28/2010

Blankfein's "strategy" was to come in and act like he had no idea why he was there.
It was like Danny DeVito in "Tin Men", only the movie was entertaining.

Blankfein, Sparks, etc. might get it if they wind up in prison.
Hold on to that soap, boys.

[stevendedalus3]

02:17 PM on 04/28/2010

Inconceivable: Viewing the GoldmanSach’s hearing in which there was a consistent display of arrogance and pretentious ignorance, how could the company stock remain on the positive side for such a horrendous day? I realize last week it lost some 12%, but this should have sealed its downfall except for the nagging factor that GoldmanS is too big to fail.

[john88]

01:53 PM on 04/28/2010

Stocks up 2%, LLoyd made over 5 million on his exercised options for testifying yesterday.

[Clayton139]

01:54 PM on 04/28/2010

Yep !

[Clayton139]

01:48 PM on 04/28/2010

This were all Grandstanding !
They are all in bed together !
Follow the money !

[Jimmy Dugan]

01:15 PM on 04/28/2010

Search "Big Old Lemons" for another great reprimand of Goldman Sachs by Senator Levin. In my opinion, it was even more effective than the amusing ordure related reference that has been predictably picked up by the media.

[Jimmy Dugan]

12:56 PM on 04/28/2010

Although this may be one the most provokative excerpts from the hearing due to the profanity, it wasn't Levin's most effective rebuke of the Goldman bankers. Later on, after Sparks tells one of the Senators that he has no regrets, Levin again reads from internal documents that show how Goldman peddled lousy paper with no regard to their clients or the economy. Caught in a contradiction and unable to respond, Sparks can only bury his head in the folder in front of him while Levin excoriates him for his lack of remorse. It was masterful.

[Clayton139]

02:13 PM on 04/29/2010

Nothing will happen from it !

[StephenJK]

12:55 PM on 04/28/2010

A bunch of sociopathilogical mad men.

[hottpotat0]

12:30 PM on 04/28/2010

Blankfein got paid millions to fall on the sword in public!!!!!!!!!!!