A bit of good news for the mortgage finance industry today, as Goldman Sachs CEO Lloyd Blankfein said in remarks Tuesday that the investment bank will not take a significant hit tied to turmoil in the mortgage-related securities markets. From Bloomberg:
“As we said at the end of the third quarter, we continue to be net short in these markets,” Blankfein said in response to a question about the firm’s position. “We said at that time we continue to be bearish on the sector.” … Blankfein, 53, said his firm has “a pretty good grip” on the valuation of its so-called Level 3 assets, which are the most difficult to value. Assets that fall into the category include private equity and real estate investments, leveraged loans and mortgage-related securities.
Goldman holds some $50 billion in illiquid investments, and analysts had speculated that Goldman wouldn’t be able to avoid the write-downs that have plagued every one of the firm’s major competitors. The stock bounced in mid-afternoon trading, rising 6.5 percent to $228.66.
