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April 28, 2010
The Senate questioned the CEO of Goldman Sachs and other executives for more than eleven hours on April 27th. The most memorable moment came from Senator Levin using the word “shit” or “shitty” more than a dozen times as he referred to an internal Goldman email. In 2007, Tom Montag had emailed traders about a “shitty deal” that they were selling to clients.
There was almost no press coverage on April 27th of the fact that Mr. Montag later left Goldman Sachs to join Merrill Lynch under CEO John Thain. Merrill Lynch subsequently went on to suffer major losses from bad debt related to the subprime housing mortgage bubble and John Thain was forced out. However, Montag took a controversial pay of approximately $40 Million in 2008 as Merrill Lynch and the rest of Wall Street imploded, requiring hundreds of billions in taxpayer bailouts.
One ironic aspect of this connection between Goldman and Merrill is that Mr. Montag now looks out of his office window and trading floor that he manages and sees the new Goldman Sachs headquarters 75 yards away. It’s a tale of have and have-nots. Goldman Sachs, admired or hated, managed their risk well throughout the housing bubble burst, whereas Merrill Lynch was saved only by a takeover from Bank of America that some say was coerced by top federal officials.