Did Goldman Sachs Con Its Customers? You Bet

Starting in late 2006, Goldman Sachs made trades that would pay off if the housing market tanked. Was this a massive bet that the housing market was going to crash, as Goldman's critics maintain? Or was it merely a hedge, an attempt by the firm to reduce its risk, as Goldman claims? This debate, which has raged for more than three years, has lately taken on a new significance. Sen. Carl Levin, D-Mich., stops just short of accusing Goldman's top executives of perjury for describing the position as a hedge in their testimony before the Permanent Subcommittee on Investigations, which he chairs. Goldman, for its part, says its executives were telling the truth.