Congressional investigators yesterday accused Goldman Sachs of taking a "net short" position in the US mortgage market in 2007 that enabled it to benefit from the bursting of the housing bubble.
The assertions set the stage for today's testimony by Goldman officials including Lloyd Blankfein, chief executive, before the Senate permanent subcommittee on investigations. The panel has conducted a 16-month probe into Goldman's trading positions, and whether it was working for or against its clients. Goldman has acknowledged that at times in the 2007-08 period, it bet against mortgage-backed securities to reduce its exposure to the US housing market. But it said it lost $1.2bn on mortgage-related trades in those years and has denied that its trading positions conflicted with its a...
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