Following the money in the Subprime loan scandal.

(h/t Crooks and Liars)

Bloomberg News via International Herald Tribune (h/t to the Europe-touring Mike)

Treasury Secretary Henry Paulson says that the United States is examining the subprime mortgage crisis to ensure that “yesterday’s excesses” are not repeated. He could be talking about himself and his former firm, Goldman Sachs.

Paulson does not mention that Goldman still has on the market an estimated $13 billion of almost $37 billion in bonds backed by subprime loans or second mortgages that it created while he was its chief executive. Those bonds have an average delinquency rate of almost 22 percent, higher than the average of other subprime bonds from the period, according to data compiled by Bloomberg.

Goldman, the most profitable investment bank, was one of 14 primary dealers of U.S. Treasury notes that contributed to a three-year binge as $1 trillion worth of subprime mortgages were packaged and sold to investors. The value of its remaining subprime bonds trails the $33 billion at Lehman Brothers, out of $106.8 billion created during the time Paulson was at Goldman, and $28.8 billion at Morgan Stanley, out of $82.5 billion.

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