goldmanGoldman Sachs' top executives were aware that the company made money by playing against the US housing market, according to internal e-mails released Saturday.

The bank's chief executive Lloyd Blankfein wrote in November 2007 that the firm "didn't dodge the mortgage mess," but "made more than we lost" by betting against the housing market, the Associated Press reported.

The e-mail was one of several company documents subpoenaed by a Senate investigations panel. In many of the e-mails, Goldman executives brag about money they were making as the market crashed around them.

One Goldman Sachs trader wrote in e-mails to a woman he apparently was courting that investments he had sold were "like Frankenstein turning against his own inventor." In another e-mail, the same trader dismissed the debts created for the bank as "pure intellectual masturbation."

"I'm trading a product which a month ago was worth $100 and today is only worth $93," wrote Fabrice Tourre, who was charged along with the bank in a civil complaint filed this month by the Securities and Exchange Commission. "That doesn't seem like a lot but when you take into account ... (the investments) are worth billions, well it adds up to a lot of money."

The documents seem to contradict Goldman's denials that it profited from the subprime mortgage meltdown by secretly betting that housing prices would fall. At the same time, Goldman was selling tens of billions of dollars in risky mortgage securities.

Goldman Sachs, the world's largest investment bank, was the only major Wall Street firm to escape much of the subprime crash that triggered a world-wide economic meltdown.

The company now says that it only bet against the market for the sake of its clients.

According to media reports, the bank is already preparing a detailed defense against accusations that it intentionally misled the public and therefore shares guilt for the economic crisis.

The supposedly 11-page-long document will be used by Blankfein when he testifies Tuesday in front of the Senate Permanent Subcommittee on Investigations.

The e-mails are only the latest scandal that will help Democrats push financial reform through Congress, according to New York Times columnist Frank Rich.

He added, however, that it remains uncertain how much influence the banks' lobbyists will exert over the legislation:

Salutary as this rush of events is, it still adds up so far to just one small step for mankind. We don’t yet know how many loopholes lobbyists will slip into the bill-in-progress. We don’t yet know the outcome of the S.E.C. case, let alone what other much-needed legal pursuit of Wall Street may follow it. And we still don’t know what, if any, true correction lies ahead for the financial sector’s runaway casino culture � much of it legal � that turned a subprime-mortgage bubble in a handful of overheated American states into an international economic meltdown.