The recent leg down in the markets has been due, in large part, to the fact that specific firms have been forced to seek individual solutions to survive, whereas before we were more focused on general economic statistics. We are attacking each one and the list I came up with above is almost completed. What are the next shoes to drop after these are resolved? If there aren’t any/many more, could that mark a short-term bottom?
Enjoy this post? Subscribe to the blog and never miss another one:
Subscribe in a reader | Subscribe by email | Subscribe with Kindle
| 
What is the “problem” with Goldman Sachs that I can’t see? In my strong opinion, they are conservatively funded and will remain independent, alive and well.
Right now the entire investment bank business model is being questioned because without a deposit base these firms need to rely on borrowing money every day to run their operations. People are worried that if the borrowing ability is reduced or eliminated, a run on the bank can occur and bankrupt them rather quickly.
When the market funds your business, the market needs to be confident in your business model. Right now it isn’t convinced, so it is not necessarily an issue of reality, but rather one of perception. GS has to solve that somehow to restore confidence.
Remember, the problem is that solvent firms can still go under right now due to lack of liquidity. That is why the government has stepped in with cash, because nobody else could.