Goldman Sachs and the Big Short
Questions for this case:
1. What is the financial condition of Goldman Sachs as of the third quarter of 2007?
2. What is your assessment of the effectiveness of the firm’s risk management practices during the 2006-2007 periods?
3. Did Goldman Sachs have a conflict
of interest when it sold subprime mortgage-based financial products to its
customers while, at the same time, it sold subprime mortgage securities and
shorted the subprime market? Explain.
4. Consider David Viniar’s options as he reviews the e-mail from Joshua Birnbaum. Should Viniar support, reject or defer judgment on the proposed strategy to go long in subprime mortgages?