Goldman Sachs stands alone ...for now

Goldman Sachs says no writedowns are coming. Some are skeptical, but at this point, the fact that they have no plans for writedowns is pretty amazing. Clearly, it has separated itself from the pack. Attempting to emulate Goldman's use of its balance sheet has not turned out well for Merrill Lynch anyway. Goldman's good fortune was its hedges against the credit-inspired downturn. No one is sure exactly how it was able to do this, or if those hedges are all that liquid. The key now will be to exit those hedges in a timely fashion; you have to assume those positions are still open. If the market were to reverse the firm could get caught.
- Jim