Goldman Sachs Denies Betting Against Its Mortgage Clients

Top Goldman Sachs executives said Wednesday they didn't bet against its own mortgage securities clients, defended the firm's relationship with AIG and said they were "grateful" for the bailout money they received.

The infamous vampire squid made a killing betting against the subprime mortgage market in 2007 while continuing to sell mortgage securities to its clients. But Goldman CEO Lloyd Blankfein and President Gary Cohn said they don't see the connection.

"The firm did not generate enormous net revenues or profits by betting against residential mortgage-related products, as some have speculated," Blankfein and Cohn wrote in a letter to shareholders introducing the firm's annual report. "Although Goldman Sachs held various positions in residential mortgage-related products in 2007, our short positions were not a 'bet against' our clients."

Blankfein and Cohn did acknowledge one bet that paid off -- their assumption that they would be deemed "too big to fail" by the federal government. The Goldman execs said the firm is "grateful for the indispensible role" of government in their salvation. They downplayed their firm's role in AIG's collapse, however, and did not address the windfall payoff they received as a result of the AIG bailout.