United States Senate
PERMANENT
SUBCOMMITTEE
ON
INVESTIGATIONS
Committee on Homeland Security
and
Governmental AffairsCarl Levin, ChairmanTom Coburn, Ranking Minority Member
EXHIBITS
Hearing
On
W
ALL
STREET
AND
THE FINANCIAL
CRISIS:THE
ROLEOF
INVESTMENT
BANKS
April
27, 2010
199 Russell Senate Office Building, Washington, D.C. 20510
United States SenatePERMANENT SUBCOMMITTEE ON INVESTIGATIONS
Committee on Homeland Security and Governmental AffairsCarl Levin, ChairmanTom Coburn, Ranking Minority Member
E X H I B I T L I S T
Hearing On
WALL STREET AND THE FINANCIAL CRISIS:THE ROLE OF INVESTMENT BANKS
April 27, 2010
1. a. Memorandum from Permanent Subcommittee on Investigations Chairman Carl Levin andRanking Minority Member Tom Coburn to the Members of the Subcommittee.b.
Excerpts from Documents Related to Goldman Sachs: Short Positions and Profits
, chartsprepared by the Permanent Subcommittee on Investigations.c.
Excerpts from Documents Related to Goldman Sachs: Profiting at the Expense of Clients
,chart prepared by the Permanent Subcommittee on Investigations.d.
Excerpts from Documents Related to Goldman Sachs: Abacus and Other Deals
, chartprepared by the Permanent Subcommittee on Investigations.e.
The Goldman Sachs Conveyor Belt
, chart prepared by the Permanent Subcommittee onInvestigations.f.
Long Beach Mortgage Trust 2007-A
, chart prepared by the Permanent Subcommittee onInvestigations.
Documents Related to Short Positions and Profits:
2. Goldman Sachs internal email, dated December 2006, re:
Subprime Mortgage Risk (...analysisof the major risks in the Mortgage business.)
.3. Goldman Sachs internal email, dated December 2006, re:
Subprime risk meeting withViniar/McMahon Summary (...let’s be aggressive distributing things ....)
.4. Goldman Sachs internal email, dated December 2006, re:
Single-A ABS CDOs (We have a bigshort on ....)
.5. Goldman Sachs internal email, dated December 2006, re:
Are you around? (On baa3, I’d saywe definitely keep for ourselves. On baa2, I’m open to some sharing to the extent that it keepsthese customers engaged with us.)
.6. Goldman Sachs internal email, dated January 2007, re:
...post (...pair the single-A ABS CDOrisk we take back with the big short position we have built in that space.)
.
-2-7. Goldman Sachs internal email, dated February 2007, re:
Post (Subprime environment - bad and getting worse. *** ...plan to play from short side. *** Credit issues are worsening on dealsand pain is broad ....)
.8. Goldman Sachs internal email, dated February 2007, re:
Post (...our risk reduction programconsisted of: (1) selling index outright (2) buying single name protection (3) buying protectionon super-senior portions of the BBB/BBB-index .... *** That is good for us position-wise, bad for account who wrote that protection ... but could hurt our CDO pipeline position as CDOswill be hard to do.)
.9. Goldman Sachs internal email, dated February 2007, re:
Block size tranche protection offersfor... (We need to buy back $1 billion single names and $2 billion on the stuff below - today.I know that sounds huge, but you can do it - spend bid/offer, pay through the market, whatever to get it done. *** This is a time to just do it, show respect for risk, and show the ability tolisten and execute firm directives. You called the trade right, now monetize a lot of it.)
.10. Goldman Sachs internal email, dated February 2007, re:
Mortgages today (We are net short,but mostly in single name CDS and some tranched index vs the some index longs.)
.11. Goldman Sachs internal email, dated February 2007, re:
goals (Reduce risk ... get super-seniorsdone on CDOs ... cover more single name shorts ....)
.12. Goldman Sachs document,
Mortgage VaR change (Q1'07 vs. Q4'06) (...desk increasing their net short risk in RMBS subprime sector.)
.13. Goldman Sachs internal memorandum, dated February 2006 [sic - accurate year is 2007], re:
February 28 FWR
[Firm Wide Risk]
Minutes (...business working to reduce exposures; a lot
th
of shorts already covered.)
.14. Goldman Sachs internal email, dated March 2007, re:
call (Trade everything from short to flat - Get out of everything)
.15. Goldman Sachs internal email, dated March 2007, re:
+0.79% NK225 +1.62% HANG-SENG(A big plus would hurt the Mortgage business but Justin thinks he has a big trade lined up for the morning to get us out of a bunch of our short risk)
.16. Goldman Sachs internal email, dated March 2007, re:
Mortgage Talking Points for EarningsCall (The Mortgage business’ revenues were primarily driven by synthetic short positionsconcentrated in BBB/BBB- subprime exposure and single A CDO exposure which benefited from spread widening.)
.17. Goldman Sachs internal email, dated March 2007, re:
Mortgage presentation to the board (...inthe synthetics space, the desk started the quarter with long $6.0bn notional ABS BBB- risk and