In the fall of 2007, when the U.S. economy first seemed in peril, I began answering reader queries here on the Business Desk. I still do so occasionally, but this page has expanded to include posts from eminent economists, "far-flung correspondents," and a variety of voices that have intriguing and/or useful things to say about economics, broadly defined. Please feel encouraged to respond to any and all of them.
Question: Why is there no more mention of "toxic assets?" Does Goldman Sachs have any toxic assets on their balance sheet?
Paul Solman: Well, Goldman was SELLING toxic assets like mortgage-backed securities to clients, but is proud of the fact that it stopped holding them for its own account sooner than its rivals. One charge against the firm is its having continued to sell toxic assets while betting against them with AIG, bets we taxpayers wound up making good on.
As to Goldman's current balance sheet? Who knows? Remember, today's meat could be tomorrow's poison. Hey, if interest rates were to spike suddenly, TREASURY BILLS could become toxic, right?