I watched a lot of the hearings, and had to laugh at the inquisitors and inquisitees staring each other down over those enormous binders. Here's Senator Levin wrestling with one:
Rights to this photo belong to the Associated Press; it is the work of Charles Dharapak.
Surely they will feature in a gag on SNL, or The Onion.
If there will be a criminal probe, it may not be good for Goldman's reputation or earnings. Years ago I worked for a Wall Street firm that was prosecuted for all sorts of things -- the late, great Drexel Burnham Lambert. The efforts of Rudolph Giuliani, who led the witch hunt and went on to become America's mayor, ultimately put Drexel out of business.
I have no idea what any investigation would turn up for Goldman, but remember well it was not good for Drexel's business: many institutional clients, such as state pension funds, are prevented by their charters or laws from dealing with firms found guilty of crimes. And there were plenty of others that curtailed or stopped their business with the firm just on general principles.
Accordingly, expert brokerage firm analyst Guy Moszkowski pulled his "buy" rating on Goldman's shares, and as I write this (11:30am Friday) they are off eight percent for the day in an otherwise lackluster market.
But on the way to the poorhouse, I also remember an unbelievable document gathering effort. I was just a little guy, but even so had to deliver to the Feds two cartons of calendars, notes, and other stuff related to the subjects under inquiry. They sent me copies, but then they lost the originals, and had to come back and make copies of the copies.
So maybe there's an opportunity here -- in the stocks of companies that make copy paper, printer ink, small bottles of water, handkerchiefs, and whoever it is that provides those great binders!