When the credit crisis first hit last year, Goldman Sachs (GS) was crowned the king of Wall Street due to the fact that they not only had little or no exposure to subprime, but they were actually short the stuff. When the rest of Wall Street was starting to 'fess up to losses in their subprime mortgage portfolios, Goldman was announcing record profits. The aura of Goldman spread across all asset classes. They became a modern day EF Hutton. Whenever an analyst from Goldman made a call, it made headlines. When Goldman said oil was going to $200, it wasn't a matter of if, but when.
Today, however, things for Goldman aren't much better than they are for the rest of the brokerage sector. As shown below, Goldman is now down more than 70% from its peak of over $250. While this is still considerably better than the rest of its peers, unfortunately for Goldman, it is catching up to names like Morgan Stanley and Merrill Lynch. It just goes to show that even the best storm preparations don't always stand up to the elements.
In order to completely catch its peers in terms of declines, GS still has a ways to go, however. To match the declines in its two closest competitors (Morgan Stanley (MS) and Merrill Lynch (MER)), Goldman would have to fall to $51 and $41, respectively. To match the decline of Bear Stearns, the stock would have to fall to $11, and if the unthinkable were to happen and Goldman had a decline similar to Lehman, the stock would have to fall to 20 cents.