Goldman Sachs’ chief executive said in an interview broadcast on Sunday that his company bears some blame for the real estate bubble that led to the global financial meltdown.
Asked by CNN whether he felt that the company’s actions played a role in the real estate bubble that led to the crisis, Goldman chief executive Lloyd Blankfein answered: “Yes.”
“We made a contribution to the bubble,” he said, adding that executives at the company now “beat ourselves up” for the error, although he said there was a lot of blame to go around.
“How did we make a contribution? We’re a lender. We lent money to companies, we lent, we financed real estate ventures that had too much leverage, we made a contribution to leverage,” Blankfein said.
“State and local governments took on debts and deficits, the federal government took on big deficits. All made a contribution to the over-leverage — and consumers over-leveraged themselves, but did we play a role in that? Absolutely we did,” he said. “Did we think we were doing that at the time? No. In hindsight? Yes. Should it have been more clear? We beat ourselves up for that.”
Goldman has been roundly berated for having emerged a highly profitable winner in the wake of the financial crisis, while many of its investors suffered major losses.
Blankfein’s concession came just days after a contentious congressional hearing last week at which he and other current and former Goldman employees denied any wrongdoing after a Senate investigation found the firm bet heavily against the housing market in 2007, without telling investors who were buying its mortgage-backed securities.
News reports said last week that Goldman is under criminal investigation by US federal prosecutors trying to determine whether it committed securities fraud in connection with its mortgage trading.
Blankfein also told CNN that his humble upbringing helped him understand the human dimension of the scandal, which has sullied the investment giant’s once sterling reputation.
“I grew up in public housing. My dad, for most of my life, worked for the post office, which was a terrific job to get because you couldn’t lose your job,” he said. “Before he got that job, he had lost his job and I remember, one of my earliest memories, memories was my own dad being unemployed and the insecurity I felt.”
“I think about it all of the time,” he said, adding that his father died about 20 years ago. “I look in my mirror and the older I get, the more I look like my dad everyday. I think that is a huge advantage to me in my life to have that. I think it’s been a huge advantage to me in my life to have come up [with] that kind of, those kinds of stresses and strains.”
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
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