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Here are a couple of stories on how Goldman Sachs made stellar profits while other banks and financial institutions struggle with the subprime mortgage crisis. It is interesting to note in the first article that the traders who helped Goldman Sachs to achieve the profits received only a simple thank you, indicating the extremely strong team culture within the firm. 
http://blogs.wsj.com/deals/2007/12/14/there-is-no-i-in-goldman-sachs/
http://www.independent.co.uk/news/business/news/credit-crunch-the-4bn-killing-765261.html
ClicK HERE for full story from Wall Street Journal columnist
Picture paints a thousand words.
Click HERE for the excel file.
This article vividly describes the last days of Bear Stearns before its collapse. It is rather interesting to have a read. Click HERE.
As I update this post, it’s close to 10 months to the collapse of Bear Stearns. While the demise of Bear Stearns at its time was unthinkable, we have already seen how far the credit crisis can go with nationalization of Fannie Mae and Freddie Mac, collapse of Lehman Brothers and bailout of AIG.
While 2009 is a new year and the market rallied for the first 9 days of the new year, the mood remained to be somber as the impact of the credit crisis hits the real economy hard. The November figure for unemployment rate was at a staggering 6.7%. Though this is short of the 26% seen in the Great Depression, still, it is rather worrisome. Also, the house prices for November as tabulated by the Case-Shiller Index was down 18% compared to a year earlier. There are no signs of recovery and no indication how long and deep this recession will be.
In retrospect, the bailing out of Bear Stearns was the mark of the beginning of the end of Wall St. The business models of the pure investment banks were broken with Lehman’s collapse and acquisition of Merrill by Bank of America. Goldman Sachs and Morgan Stanley have convert to be commercial bank with holding deposits as well. There will be more to come and to see in the upcoming 6 months, and without a doubt, things will be grim for some time.
p/s: For an excellent article on the fall of Lehman, please read this
