The Real Deal Miami

Goldman execs say didn’t “bet against” clients

April 07, 2010 04:02PM

Despite the “various positions” that investment firm Goldman Sachs Group says it held in the mortgage-derivatives market in 2007, it did not “bet against [its] clients,” top executives claim. Goldman posted a record $11.6 billion profit in 2007, and some critics say that’s because the firm banked on the subprime market declining, even as their clients bought up subprime mortgage-backed securities. CEO Lloyd Blankfein and President Gary Cohn said that market acumen — and not subprime shenanigans — helped them avoid catastrophe. “Our relatively early risk reduction resulted in our losing less money than we would have when the residential housing market began to deteriorate rapidly,” the two executives said in a written statement.