Last month I speculated “Goldman is still short the CDO markets and if they are, that means they are still profiting handsomely from it.” Goldman Sachs (GS) affirmed that speculation today.
CEO Lloyd Blankfein said Tuesday that the firm maintains a short position in the subprime mortgage market and will not be taking any significant charges to write off losses on its position. He also said that the firm remains bearish on the mortgage backed securities market and that new accounting rules regarding certain assets the firm holds would not hurt the company’s business.
Since Goldman reported results, the mortgage markets has declined significantly with the majority of bank write-downs coming recently. This has to lead one to believe that Goldman should see even better results from these short position that they saw last quarter. shares have retreated from a high of $249 down to almost $200 recently but are surging in this news today up $10 to $225.
Goldman is the creme of the crop here….
