Goldman CEO Blankfein is surprisingly optimistic

Posted Nov 13th 2007 1:00PM by Jonathan Berr
Filed under: Major Movement, Forecasts, Other Issues, Good news, Citigroup Inc. (C), Bank of America (BAC), Goldman Sachs Group (GS), Housing

Even though Merrill Lynch & Co. (NYSE: MER), Citigroup Inc. (NYSE: C) and Bank of America Corp. (NYSE: BAC) have taken multi-billion dollar write downs because of the collapse of the subprime mortgage market, Goldman Sachs Group Inc. (NYSE: GS) appears to be weathering the meltdown just fine.

Speaking at a Merrill Lynch conference, Chief Executive Lloyd Blankfein said the investment bank doesn't expect to take any significant write downs and has a "pretty good grip" on asset valuations, according to Reuters. Moreover, the company has a short position in subprime mortgages. Shares of Goldman Sachs, which haven't done squat for the past six months, are up 5.5% in mid-morning trading to $226.56.

Whomever decided to go short in subprime mortgages, will no doubt be getting a fat bonus. Investors shouldn't pop the champagne corks quite yet. The extent of the subprime meltdown is still being determined because the housing market won't rebound for quite some time.

Tags: BAC, GS, housing market, HousingMarket, inthenews, MER, nyse, subprime mortgage market, SubprimeMortgageMarket, wall street, WallStreet