Carl Levin, chairman of the Senate Permanent Subcommittee on Investigations, which has been looking into Goldman-Sachs dealings for the past 18 months, did nothing to conceal his disdain for the firm's activities in hearings this morning. In questioning Daniel Sparks, former Mortgages Department Head at Goldman, Levin accused the firm of knowingly selling a "shitty deal" to its customers. The deal was one using mortgage-backed securities and its excremental value was noted by division head Tom Montag in an email to Sparks.
Levin: $600 million in Timberwolf Securities is what you sold. Before you sold them, this is what your sales team were telling to each other. Got it? 105?
Sparks: Yes, Mr. Chairman.
Levin: Look what your sales team was saying about Timberwolf. "Boy! That Timberwolf was one shitty deal."
Sparks: Mr. ...
Levin: They sold that shitty deal ...
Sparks: Mr. Chairman. This email was from the head of the division, not the sales force ...
Levin: Whatever it was, it's an internal Goldman document.
Sparks: This was an email to me in late June ...
Levin: Right, and you sold Timberwolf ...
Sparks: after the transaction...
Levin: No, no. You sold Timberwolf after as well.
Sparks: We did trades after that.
Levin: Yeah. OK. The trades after ...
Sparks: Some context might be helpful.
Levin: The context ... let me tell you, the context is mighty clear. June 22 is the date of this email: "Boy, that Timberwolf was one shitty deal." How much of that shitty deal did you sell to your clients after June 22, 2007?
Sparks: Mr. Chairman, I don't know the answer to that. But the price would have reflected levels that they wanted to invest in at that time.
Levin: Oh, of course, but they don't know ... you didn't tell them it was a shitty deal.
Sparks: Well, I didn't say that.
Levin: Who did? Your people internally. You knew it was a shitty deal, and that's what your emails showed.
If only we could get as much candor as contained in this email about the rest of the shitty deals Wall Street and its enablers in the government have laid on the economy. Deals like the eviscerating of Glass-Steagall, for instance. As we saw yesterday, there is in the Senate a stubborn group that doesn't even want to discuss diluted regulatory measures to make future shitty deals less shitty.