Credit deleveraging will continue for awhile. As assets continue to decline, Goldman will continue posting new losses. Their hubris in assuming they don't need government capital injections when they're leveraged 32x in the middle of a deleveraging cycle is astounding. Keynes once wrote markets can stay irrational longer than you can stay solvent. No new IPO's. No acquisitions. No new underwriting. Where are the earnings? Where is the pipeline?
If it's not government injections, it will most definitely be private injections, which is ultimately dilutive to existing shareholders.
$91.75 (02/11/09)
