[…] one of the most startling, and perhaps troubling, moments during this debate was the little attention paid to one of the most gripping economic issues erupting on the American landscape — the mortgage lending crisis. Questions about it […] seemed an afterthought, tucked in at the end between merit pay for teachers and a query about what epiphanic moment led each of the Democratic candidates to the “broad path’’ that reached the debate stage.
The time allotted to this issue seemed, well, paltry, given the state of small rural farms foreclosed on in the last two decades (a topic that resonates in Iowa), and now the problems facing many homeowners across the country, with the markets roiled by hedge fund investments and lending practices that someone like former Senator John Edwards has railed against (although The Wall Street Journal just chronicled how a big hedge fund in which he invested, Fortress Investments, has a business that foreclosed on homes in the “storm-slammed’’ region of New Orleans). And the answers were, well, almost unprepared, surprisingly, for dealing with the crisis. And it was posed as a “yes-no’’ question?
How Goldman Won Big On Mortgage Meltdown
Wall Street Journal | Kate Kelly | December 14, 2007 at 03:35 PM
The subprime-mortgage crisis has been a financial catastrophe for much of Wall Street. At Goldman Sachs Group Inc., thanks to a tiny group of traders, it has generated one of the biggest windfalls the securities industry has seen in years.
The group’s big bet that securities backed by risky home loans would fall in value generated nearly $4 billion of profits during the year ended Nov. 30, according to people familiar with the firm’s finances. Those gains erased $1.5 billion to $2 billion of mortgage-related losses elsewhere in the firm. On Tuesday, despite a terrible November and some of the worst market conditions in decades, analysts expect Goldman to report record net annual income of more than $11 billion.