I authored another thread which I can't find so I thought I would start a new one updating my thoughts on this one. If you have ever been through a lawsuit, then you know the other side can subpoena just about anything they want. The Discovery process is even worse then a police interogation. A subpeona gives the other side the right to get inside your home and take out whatever they see fit. More stuff will be discovered at Goldman and some of its employees will probably break down during the Discovery process singing a song. Then there is the President and Congress. Goldman thumbed their nose at them during the whole financial catastrophe and made them look bad. The executive and legislative branches are going to come down on Goldman HARD. The President has his own army of agencies beyond the SEC like the IRS and if they dont put a knife in them with the SEC he will get them in other ways. They might even author legislation to break Goldman apart like they did the Bells. Right now, Morgan Stanley is the approved broker by the Obama regime. It is the broker that the government uses for stock transactions like the Citi deal. I do not think Goldman will go bankrupt. There will always be a core set of customers and they have a ton of cash. However, GS is way overvalued at the current price. Their investment banking business, which makes up about 20-30% of their revenue, has been smashed. Goldman simply could have come out, much like the Vatican and Toyota Motors during their mishaps, and apologized. They could have come out to accept responsibility, settle the outstanding claims and drove on. However, they went the low road by making the hearings look like a remake of the Iran/Contra affair hearings..."uhhh...I dont know, I wasn there, I dont recalll...." I can picture the Fabulous Fab laughing his ass off after the Congressional hearings at one of the local DC bars bragging about how he fooled them. A week ago, I met up with someone who told me that they thought GS will pull out of this. I don't think so. This incident will dog them for many years to come. 7 out of 10 Americans agree that Goldman committed fraud therefore they will lose 70% of their investment banking business and that 70% will be transferred over to the approved broker...Morgan Stanley. Yes sir, Goldman is a buy at $50...and it will take some time to get there...but it surely will and just as Buffet was early in buying USG he will also found to be too early on the trade with Goldman... I would not try to trade Goldman. Look at Friday where all of a sudden the stock opened down 10 points and a stop would not have saved you. I saw the usual suspects a few days ago get long GS like Doug Kass and Tim Knight, but now they are silent on that long trade after the shellacking on Friday where they lost 10% over the course of a warm Spring night. Thats what happens when you trade a downtrending stock where the government has declared war on.