LEVIN: OK. Now, before you sold all that stuff that we just described in 166, $600 million of 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."
LEVIN: They sold that "shitty deal." ...
SPARKS: Some context might be helpful.
LEVIN: Context, let me tell you, the context is mighty clear. June 22 is the date of this e-mail. "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...
LEVIN: Oh, of course.
SPARKS: ... at that time.
LEVIN: But they don't know it's a -- you didn't tell them you thought it was a shitty deal.
SPARKS: Well, I didn't say that.
LEVIN: No. Who did? Your people, internally. You knew it was a shitty deal, and that's what your...
SPARKS: And again, I...
LEVIN: ... e-mail showed.
SPARKS: I think the context, the message that I took from the e-mail from Mr. Montag, was that my performance on that deal wasn't good, and, I think, the fact that we had lost money related to that wasn't good.
LEVIN: How about the fact that you sold hundreds of millions of that deal after your people knew it was a shitty deal? Does that bother you at all, you sold the customers
SPARKS: I don't recall selling hundreds of millions of that deal after that.
It's tough to tell from that exchange what "shitty" means. Senator Levin's behavior was pretty shitty, though. And it's worth remembering one other thing as well. Hinderaker:
Today's inquisition was a sideshow. Here is what really happened: there was a bubble in housing prices. The bubble was mostly the result of government policy--loose money, combined with pressure on banks to make bad loans to unqualified home buyers. It all worked for a while because Fannie Mae and Freddy Mac, under the leadership of Congressman Barney Frank and others, created a secondary market for shaky mortgages. Goldman Sachs participated in this market, downstream, along with many other players. But the whole thing wasn't an accident or a conspiracy, it was government policy. The home price bubble could have only one possible result. All bubbles burst--there is nothing else they can do--and the bursting of a bubble is always painful. The whole disaster that began in 2008 was the inevitable result of government policy, which is why Senators are so anxious to pass the buck to Goldman Sachs.
That's right. Goldman and the other financial companies deserve some blame, especially when you consider how they gift wrapped the manure. But we should remain mindful of where the manure was first created. And that wasn't Wall Street.