6 of 7
Josh Birnbaum
Former Managing Director, Mortgage Department

Like Fab, Birnbaum reported to Dan Sparks. The trader, who now owns his own advisory firm Tilden Park Capital Management, said he developed a negative view on the subprime market while working on the asset-backed securities desk at Goldman Sachs in 2006 and 2007.

In line with Birnbaum's view, the desk began betting against, or "shorting," mortgage-backed securities through an instrument called credit default swaps. These short positions profited as the housing market declined. Later, Goldman Sachs' management instructed him to reduce the firm's exposure to these trades.

"No one from senior management told me to make a directional bet against the subprime market. Rather, during the 2006-2007 period, regardless of whether our books were long or short, the consistent theme from management was to reduce risk in our books," Birnbaum said at Tuesday's hearing.

NEXT: Michael Swenson

Email | Print | Share
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
Last updated April 28 2010: 2:06 PM ET
Goldman execs fire back Goldman Sachs endured a fierce attack from lawmakers Tuesday about their business dealings. More
4 tough questions for GoldmanGoldman Sachs' moment of public flogging is here. More
The other side of Goldman's trades From electricians to municipal libraries, those who bought some securities packaged by Goldman Sachs wound up on the losing end. More
Special Offer