Not often I write about trading events as they happen. But I’ll make an exception today.
S&P just downgraded Goldman Sachs shares from hold to sell with a negative outlook. The outlook is perhaps even more interesting than the actual downgrade. They revised their share estimate down from $190 to $140.
Within seconds the markets globally started to drop vertically. Someone is now stepping in to buy and GS shares are hovering as I write. But all the worlds stock markets are still dropping. Citi, Wells Fargo and AIG all started dropping at the same moment, all vertical and all still dropping. I haven’t checked the others But I’ll bet all the big US banks are on the slide.
The downgrade was because it now looks certain there will be not only an SEC probe into GS share dealings but also a Federal Criminal investigation. That prosecutors are saying they will pursue this is BIG news.
Of course the slide will stop and the ‘recovery’ will be put back on track. But that point is that someone has decided to suggest Goldman and the banks may not be untouchable after all. Shades of going after Capone?
Could it really be that To-Big-To-Fail doesn’t mean Too-Big-To-Prosecute? Didn’t the Dept of Justice get the memo from the FED?