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Top Goldman Leaders Said to Have Overseen Mortgage Unit - NYTimes.com
According to these people, executives up to and including Lloyd C. Blankfein, the chairman and chief executive, took an active role in overseeing the mortgage unit as the tremors in the housing market began to reverberate through the nation's economy. It was Goldman's top leadership, these people say, that finally ended the dispute on the mortgage desk by siding with those who, like Mr. Tourre and Mr. Egol, believed home prices would decline.
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By early 2007, Goldman's mortgage unit had become a hive of intense activity. By then, the business had captured the attention of senior management. In addition to Mr. Blankfein, Gary D. Cohn, Goldman's president, and David A. Viniar, the chief financial officer, visited the mortgage unit frequently, often for hours at a time.
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Goldman's top ranks changed its stance on housing in December 2006. In a meeting in a windowless conference room on the executive floor, Mr. Viniar, the chief financial officer, and Mr. Cohn, the president, gathered about 10 executives for a briefing. Mr. Sparks, the head of the mortgage unit, walked them through the numbers. The group was unanimous: Goldman had to reduce its exposure to the increasingly troubled mortgage market.

A few months later, in February 2007, senior executives began turning up on the trading floor. The message, one former employee said, was clear: management was watching. "They basically said, `What does this department do? Tell us everything about mortgages,' " this person said.

The executives told Mr. Sparks to tell his traders to sell Goldman's positive bets on housing. The traders' short positions -- that is, negative bets, mostly used to hedge other investments -- were placed in a central trading account.



"Ce qui vient au monde pour ne rien troubler ne mérite ni égards ni patience." René Char
by Melanchthon on Mon Apr 19th, 2010 at 05:45:45 AM EST
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