As Economy Cratered, Goldman Sachs Execs Boasted of Profits in E-mails

E-mails sent by Goldman Sachs and released in a Senate investigation reveal executives bragging about profits earned from short-selling their own toxic investment products. Short-selling is betting a security will decrease in value.

"We lost money, and then made more than we lost because of shorts," Goldman CEO Lloyd Blankfein said in a Nov. 18, 2007 e-mail. Part of Goldman´s strategy was to advertise toxic mortgage-bundle securities as investments that would rise in value.

The SEC says Goldman actually designed the securities to decrease in value, which would make Goldman a profit because it had short-sold them. The bank had previously claimed that it had lost money on those securities as the housing crisis deepened.