Unlike Morgan Stanley and Merrill Lynch, Goldman Sachs never bought a subprime originator. That was reflected in its earnings. Goldman does some repackaging like all the other firms, but the effects were nil as Goldman Sachs hardly hiccuped on its way to another quarter of stunning earnings. Other firms will be reporting this week and next. The picture may not be so rosy. Recall that when Morgan bought Saxon and Merrill bought First Franklin many people praised the moves as a great way to lock in supply for their asset-backed businesses. No one was thinking about a meltdown of the proportions we are seeing. So the industry cannot assume that Goldman's results will be typical. That said, the impact may be delayed, as the main implosion occurred after the close of the quarter. This may be a next-quarter issue. We'll see. There has been some speculation about Bear Stearns' exposure.

For more:
- here's an article from TheStreet.com
- More on Goldman's earnings. Article
- New Century under investigation. Article