Sub-prime mortgage mess is taking its toll not only in U.S. but also in many other countries. People that were supposedly smart failed miserably and lost billions of dollars. Even banks in France bet and lost on subprime mortgages in U.S.
It looks like only one company played this game smart. Goldman Sachs is set to reap a windfall as a result of bets made by its mortgage department that securities backed by high-risk home loans would plunge in value. The well-timed move is expected to generate nearly $4 billion of profit for the year ended November 30th.
Some people point that Goldman’s big profits raise ethical questions, because it continued to underwrite collateralized debt obligations (CDO) with subprime exposure and sell them to customers, despite its own traders betting CDO values would fall! Wall Street is a dog-eat-dog world. I don’t think anyone there even care about ethics, including the people that complain about Goldman!
- Google Takes Aim at Wikipedia