I think people/the market don’t realize how big the consumer business has gotten at Goldman. That gives the balance sheet more stability than a LEH.

But I also don’t think people realize how reckless they’ve been building that consumer business. I’d need to see them perform in a downturn before I gave it any value at all. From a risk/reward basis I’d rather own a well-managed consumer finance business like SYF than whatever GS has been building.

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Oct 9, 2022·edited Oct 9, 2022

The thing that was frustrating with the "CS as Lehman" meme is just that a really big cause of the Lehman collapse/all of the GFC was immense, complex, unregulated counterparty risk that was marbled throughout the entire financial system. Nobody knew who owed what to whom, and it was suddenly deeply plausible that many large, cornerstone institutions could be truly insolvent.

Many of the regulatory changes after the GFC can be characterized in any number of ways, but the "big scary opaque counterparty risk" thing really has gone away post-Basel III et al. Nobody should be (or needs to be!) relying on rumors and Twitter accounts or even equity prices to signal on this stuff in the way that we had to pre-GFC.

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