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Goldman Sachs made fortune betting against clients

[ There is something suspicious about all this…  Why is Goldman Sachs now being made a whipping boy?  More likely this is a ploy used to cover up a greater scandal – or to promote new legislation that will benefit the large banks themselves…. ]

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The beleaguered Wall Street bank Goldman Sachs boasted that it was making tens of millions of dollars of profits daily by betting against its own clients’ investments, according to internal emails released yesterday by a US senator.

The annual report of the bank, which is currently facing fraud charges in the US, denied that it had generated enormous revenues by wagering on the US housing crisis. Yet an email apparently from chief executive Lloyd Blankfein to his colleagues says: “Of course we didn’t dodge the mortgage mess. We lost money, then we made more than we lost because of ‘shorts’ [bets that the market would get even worse].”

The damning material from the senate’s permanent subcommittee on investigations, which is reviewing the role of Wall Street banks in the financial crisis, was posted on the website of its chairman, Senator Carl Levin. It will be used in what promises to be an incendiary public hearing on Tuesday when Blankfein is scheduled to testify in front of the subcommittee.

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