sammyg123

Goldman: Total Leveraged Credit Losses = $1.2 Trillion

Goldman's actions reflect it's views. Goldman went short subprimes in August 2007, and heavily at that. History might judge this move as being that which started the unwinding, and thus Goldman is the smartest student in the class. I think it would be best to see if Goldman is or has been short other CDS classes, or how the firms' trading reflects this view. I wouldn't put it past Goldman to say one thing and then do another. It's par for the course in the industry, naturally.

Regardless of Goldman's views, I have to think that with banks and financial institutions' reluctance to lend, that this will further lead to some friction in all businesses which rely on bank lending to monetize their contracts. This tells me that the cost of business is going up, and the pace of business will slow by some degree. Financial institutions will want to fill the loss breaches with fresh profits, if they can, so they'll charge more. Ultimately, we all will finance the bailout, either by taxes or by increased lending rates, or both.