The untold story of Goldman, Morgan Stanley

I'm beginning to tie things together and think that the reason for Goldman/Morgan Stanley suddenly choking has more to do with the bursting of commodities rather than just their mortgage crap gone bad. Wasn't it these two firms that scared us with their hand-waved projections of $150 to 200-a-barrel oil? Now, peruse the picture below. This shows the Var (Value at Risk) for various firms from their commodities trading.

Doesn't it strike you suddenly that just as oil craters, the top investment banking firms lose loads of market value. So interestingly, it's a chicken and egg where the very reason commodities imploded was these companies or their hedgie buddies unwinding massive long positions.

What next? In comes the magician Paulson, a former head at Goldman, with his relief package. How much do you think is the market cap of the entire financial sector in the S&P 500? A back-of-the-envelope calculation says that it was about 15% of 30 trillion dollars when the financials were at their peak, so now it would be worth about half that or about 2 trillion dollars. So the govt. could actually buy up little less than half the US financial companies with their 700 billion dollar piggy bank! Hmm. Instead, by buying the toxic waste these companies hold, whom exactly are they helping out? One wonders.