We don’t normally put expletives in our headlines, but when a Senator says the word nearly a dozen times in an open hearing, who are we to argue? And, we have to admit, Senator Carl Levin (D-MI) certainly makes a compelling case when he reads back Goldman Sachs internal emails and concludes that the company’s “top priority was selling that shitty deal.”
The deal in question involved a fund called Timberwolf, which was called “shitty” in internal company emails, and which lost 80% of its value within months of being issued. Despite the apparently accurate characterization of the fund, Goldman told its sales force that pitching Timberwolf to clients was a “top priority.”
In hearings before the Senate Permanent Subcommittee on Investigations, Levin pushed Daniel Sparks, the former head of Goldman Sachs’ Mortgage Department, to admit that the company knowingly sold low-quality investments to its clients.
“You knew it was a shitty deal and that’s what your e-mails show. How much of this shitty deal did you continue to sell to your clients?” Sparks declined to answer, and did his best to avoid repeating the term.
In addition to Sparks, today’s hearings included testimony by trader Fabrice Tourre, who vowed to defend himself against the “false claim” that he defrauded investors, and CEO Lloyd Blankfein. Most denied any wrongdoing, echoing Sparks’ claim that the company made some “poor business decisions,” but didn’t do anything wrong. “Regret to me means something that you feel that you did wrong, and I don’t have that,” he said. As Levin might say, “Shitty.”
Wall Street and the Financial Crisis: The Role of Investment Banks [Senate Permanent Subcommittee on Investigations]