Monday, November 5, 2007

Goldman's subprime bonds

Bloomberg reported that GS subprime exposure, was facilitated by Treasury Secretary Hank Paulson, when he was at Goldman. They've whittled to $13 billion from the $37 billion of sub prime bonds that they're peddling that have a deliquency rate of 22%. I'll let the comments from Representative Miller speak for themselves.

"He should admit to having been involved in creating the problem that we have now," said Representative Brad Miller, a North Carolina Democrat, who introduced a bill Oct. 22 to make firms packaging subprime mortgages liable for bad loans in some circumstances...

Starting in March, Paulson said the damage was "largely contained" and was no risk to the larger economy. When other credit markets began to be affected, he and others began pushing for solutions. "I can't help but notice that when middle-class homeowners were losing their homes to foreclosure, he was pretty nonchalant about it," Miller said of Paulson. "But when Wall Street CEOs start seeing trouble in their absurdly complicated financial instruments built on the mortgages of middle-class homeowners, he feels their pain."

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