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Executive Summary The financial crisis has been a humblin g experience for every participant in the financial system. The events of the past few years have put a particular focus on risk management, its failures and its economic implications. At Goldman Sachs, we have dealt with both the challenges of navigating the crisis itself and with questions about our actions before and during the crisis. Our risk management and business practices in the mortgage market have received much attention. In that connection, we would like to make the following points:

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        

against the U.S. housing market, and the firm was not consistently or significantly net

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short

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residential mortgage-related products in 2007 and 2008, as the performance of our residential mortgage-related products business demonstrates.

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Goldman Sachs was not a dominant participant in the residential mortgage-related

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net revenues from residential mortgage-related activities were very small, both in total and relative to the rest of our business. In fact, from 2003 to 2008, annual net revenues attributable to mortgage-related products, commercial and residential,

         

In fiscal year 2007, the firm had less than $500 million of net revenue from residential mortgage-related products

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approximately

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net revenues.

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Goldman Sachs did not have access to any special information that caused us to know that the U.S. housing market would collapse. In fact, as a res ult of the spread of the crisis from subprime to all residential mortgages, Goldman Sachs had ove rall net losses of approximately $1.7 billion with respect to residential mortgage-related products for fiscal year 2008.

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Goldman Sachs did not engage in some type of massive

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against our clients. The risk management of

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exposures and the activities of our clients dictated the

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, not any view of what might or might not happen to any security or market.

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