Go Carl Levin! Goldman called out over "shitty deal"

Huff Post

Chairman Carl Levin, to the delight of the crowd, continually repeated a descriptive, colorful word typically left out of family newspapers that was used by a top Goldman executive to describe a deal it made for clients.

The security, named Timberwolf I, a collateralized debt obligation of other collateralized debt obligations that were based not on actual home mortgage bonds but instead on those bonds' movements, was referenced in a June 22, 2007, email from a Goldman senior executive, Tom Montag, to another, Dan Sparks. Sparks is testifying today before Levin's panel.

In his email, Montag remarked of the Timberwolf I deal, "[B]oy, that timeberwof [sic] was one shitty deal."

Levin used the word "shitty" 11 times -- eliciting multiple rounds of quiet giggles -- in questioning Dan Sparks, the former head of Goldman's mortgage department, about why Montag would describe it as "shitty," how long they had known it was "shitty," and whether they knew the deal was "shitty" when they peddled it to clients.

"Our clients' interests always come first," Goldman says on its website.

That security was rated less than three months prior to Montag's email. It lost 80 percent of its value within five months of issuance. Sparks and Montag have since left the firm.

Levin grew exasperated with Sparks' non-answers: "I don't think you want to answer."

The next panel member to ask questions, Susan Collins (R-Me.) also grew frustrated, saying that she was already getting tired of Sparks' evasiveness after 30 seconds. -- Shahien Nasiripour

Under tough questioning from panel member Tom Coburn (R-Okla.), Goldman trader Fabrice Tourre refused to take the bait and blame the firm for releasing embarrassing emails he sent to his girlfriend.

Tourre did express regret over the emails, including one in which he bragged about selling the lousy Abacus CDO to "widows and orphans."

"I regret these e-mails," Tourre said. 'They reflect very bad on the firm and on myself. I wish I hadn't sent those."

Coburn, who confirmed that Goldman is paying for Tourre's legal advice, also asked Tourre, "How many Goldman lawyers talked to you before this hearing?" Tourre's response: "I don't remember."