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.