Goldman Trust.(The Talk of the Town)(Goldman Sachs)

Last Thursday evening, around the time the Treasury Secretary and former Goldman Sachs chief executive Henry Paulson was down on one knee, begging the congressional leadership not to scuttle his seven-hundred-billion-dollar bailout plan, Lloyd Blankfein, his successor at Goldman, was hosting a private reception at the Public Library for several hundred of Paulson's fellow Goldman alumni. Goldman does this every year, to celebrate and strengthen the diaspora's spiritual and commercial bonds. The guests were private equity and hedge-fund managers, from some of the biggest shops in the business, and, whatever violence had befallen their portfolios in the preceding weeks, these men--and they were mostly men, in suits--could probably have passed the hat and pooled a sum large enough to rescue, say, Washington Mutual and a bank to be named later. Blankfein stood to address them, asking, with some mirth, "How was your week?"

His, as everyone present well knew, had been long--if not quite as long as Paulson's. On Sunday, Goldman, along with Morgan Stanley, had announced that it was changing its status from an investment bank to a more traditional bank holding company, with depositors, and all the benefits and strictures that come with them. It may have done so in anticipation of new regulations, choosing to do to itself what the Feds would likely have forced it to do anyway, and in recognition that its business model (borrow short, borrow long, borrow too much) would no longer fly, in a world of tightening credit and declining asset values. It had done so, as well, in desperation. Its stock had been hammered; the market was in a panic. Although it isn't clear how perilous Goldman's predicament really was (an editors' note in the Times last week parsed the paper's use of the word "ailing," concluding that " 'embattled' would have been a more accurate headline description of Goldman's state"), the firm, to heal or reinforce itself, had essentially given up being an investment bank. It would no longer be your father's Goldman, the one your mother dreamed that you'd work for, even if she said she didn't. Instead, it would be a Goldman that might give your mother a free toaster in exchange for her opening a checking account. This was a shocking surrender--the end of Wall Street, as some would have it, and the beginning of who knows what. It was as if the Yankees had announced that they were becoming the Twins.

Still, in this season's assortment of spectacular falls from grace, ...