[Email] messages appear to connect some of the dots at a crucial moment of Goldman history. They show that in 2007, as most other banks hemorrhaged money from plummeting mortgage holdings, Goldman prospered....In the third quarter of 2007, the investment bank reported publicly that it had made big profits on its negative bet on mortgages. By the end of 2007, the firm curtailed its disclosures about its mortgage trading results.
While Goldman vigorously denies claims about its significant profit, it will be interesting to see how the debate over the financial reform bill plays out in the Senate on Monday. Many Republicans are opposed to provisions such as the one requiring banks like Goldman to spin off their derivatives-trading operations into subsidiaries. As a result, they are threatening a filibuster, and the Democrats seem worried that it just might work.