"Shitty" Bets?

April 27 (Bloomberg) -- Goldman Sachs Group Inc. executives were grilled by U.S. senators probing the bank’s mortgage business as Senator Carl Levin asked why it sold a set of investments the lender had itself labeled “shitty.”
“How about the fact that you sold hundreds of millions of that deal after your people knew it was a shitty deal?” the Michigan Democrat asked Daniel Sparks, who ran the bank’s mortgage unit at the time. “Does that bother you at all?”
Levin, who heads the Senate subcommittee that’s holding today’s hearings, was referring to a June 2007 e-mail from Thomas Montag, the former head of sales and trading in the Americas at Goldman Sachs, to Sparks. The message described a set of mortgage-linked investments that his bank had been trying to sell as part of “one shitty deal.”
“I don’t recall selling hundreds of millions of that deal after that,” Sparks replied, adding that he believed the e-mail referred to his performance, not the security itself. “If you can’t give a clear answer to that one, Mr. Sparks, I don’t think we’re going to get too many clear answers from you,” Levin said.
Seven current and former Goldman Sachs employees including Chief Executive Officer Lloyd Blankfein are testifying about the mortgage-securities business in the years leading to the biggest financial crisis since the Great Depression. Goldman Sachs, the most profitable securities firm in Wall Street history, had been sued for fraud by the Securities and Exchange Commission, and contests the claim.

Source: Bloomberg Business Week