MarketWatch: You don't have to be a conspiracy theorist to recognize that a series ...

[mhatrw]

of decisions and events have transpired to put Goldman at the top of the heap. Well before the credit crisis, people worried about Goldman's influence in the markets. Several former executives of the investment bank have senior roles in government and at the New York Stock Exchange, and its analysts are among the most powerful in the space.

Let's limit the discussion to the start of the credit crisis in the summer of 2007. Just before the market turned, Goldman traders got a hunch and began shorting and hedging the mortgage securities that were eating away at rivals' revenue. Trading revenue soared 70% that quarter to $8.23 billion. It was Goldman's last quarter in a series in which each new profit report exceeded expectations and prior results. Goldman's share price was in shouting distance of $300. It was also when grumblings about the investment bank's transparency became louder. That's important because Goldman continues to give few details about its "proprietary trading" business. What is it exactly? No one knows for sure.

What followed was notable for what didn't happen: write-downs. Goldman has admitted to less than $5 billion in write-downs, including the $1.1 billion when it reported earnings Sept. 16. That's on a balance sheet of $1 trillion. In between those earnings announcements, Goldman lost its biggest competitor in prime brokerage, Bear Stearns Cos., on March 17. In September, it also lost the biggest competitor in debt underwriting, Lehman Brothers Holdings Inc., and a big rival in investment banking, Merrill Lynch & Co., in an emergency sale to a commercial bank.

Judging by the government's reaction, Morgan Stanley and Goldman should have been next -- either through a crisis sale like Merrill or a liquidation like Lehman. Investors sent their stocks reeling. Morgan Stanley quickly began talks with Wachovia Corp., while Goldman kept quiet. During all of this, Goldman Chief Executive Lloyd Blankfein was in the middle of talks about the future of another crippled company, American International Group Inc , at the New York Federal Reserve. As Gretchen Morgenson reported in the New York Times last week, those talks resulted in an $85 billion bailout of AIG via a government loan, and, oh yeah, the deal may have saved Goldman $20 billion in losses due to its trading position with the insurer."

much, much more ...

[dipsydoodle]

1. You may well be right

But once everything is unraveled over the next 6 months or so it may be completely arbitary if no one outside of the USA will deal with them due to complete mistrust.

Trust, like the soul, once departed never returns. Anyone know the latin for that ? - it was in a movie with James Mason.