Subprime RMBS performance ended its four-year free fall this month, and Goldman Sachs (GS) is denying it made billions betting against those investments and its clients. In 2009, Goldman generated a net revenue of $45.17bn, up from the $22.2bn gain in 2008 and back to the $45.9bn level in 2007, according to is 2009 annual report. The gains came even as Goldman repaid the $10bn bailout from the Troubled Asset Relief Program (TARP) Capital Purchase Program in June 2009. The diluted earnings per common share of stock reached $22.13. The book values per share grew from $20.94 at the end of the first year as a publicly traded company in 1999 to $117.48 ten years later. According to Fitch Ratings, delinquencies in subprime RMBS grew from a 6.2% low in June 2006 to a 46.9% high in February 2010, and dropped for the first time in four years to 46.3% in March 2010. In that time, many claimed Goldman was making bets against these loans and its clients’ investments, generating $4bn in additional profits in 2007, according to an article in the Wall Street Journal. Since then, the volume has increased on these accusations as even Greenspan points to the proliferation of securitized subprime mortgages as the trigger to the current crisis and Moody's downgrades $38bn in subprime RMBS. But Goldman is denying it bet against its clients. “Clients come to us as a market maker because of our willingness and ability to commit our capital and to assume market risk. We are responding to our clients’ desire either to establish, or to increase or decrease, their exposure to a position on their own investment views. We are not ‘betting against’ them,” wrote Goldman CEO Lloyd Blankfein and president Gary Cohn in a letter attached to the annual report. They said Goldman executes a variety of transactions every day, buying and selling thousands of financial instruments that expose the firm to short- and long-term risks at any given time. “This does not mean that we know or even think that prices will fall every time we sell or are short, or rise when we buy or are long,” the Goldman execs wrote. Through the end of 2006, they said, Goldman was exposed to mortgage-related products such as RMBS in the long term. By the end of that year, the firm began to see losses and decided to reduce the exposure. “The firm did not generate enormous net revenues on profits by betting against residential mortgage-related products, as some have speculated; rather, our relatively early risk reduction resulted in our losing less money than we otherwise would have when the residential housing market began to deteriorate rapidly,” they wrote. Write to Jon Prior.