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Goldman Sachs, began reducing its inventory of mortgages and mortgage securities late last year.
Even so, Goldman went on to package and sell more than $6 billion of new securities
backed by subprime mortgages during the first nine months of this year.
IHT 6/12 2007
The Wall Street banks that foresaw problems say they hedged their mortgage positions as part of their fiduciary duty to shareholders.
Indeed, some other companies, particularly Citigroup, Merrill Lynch and UBS, apparently did not foresee the housing market collapse and lost billions of dollars, leading to forced resignations of their chief executives.
Why Do Financial Firms Take Too Much Risk?
The principal/agent problem
John H. Makin, American Enterprise Institute, November 20, 2007