Goldman’s not so golden anymore…

Monday 6:34 AM
Welcome to the first day of fall…
 
Speaking of which… the last two of the five major investment banks on Wall Street — Morgan Stanley and Paulson’s “golden child” Goldman Sachs — did a little falling of their own over the weekend.
 
We awake to news that Morgan and Goldman are now banks.
 
Give me just a second to relish the scenario of Goldman traders, used to getting huge bonuses, now wearing their Brioni designer suits as they man a bank teller booth and cash Sally Lou’s $300 check at the “Bank of Goldman’s.”
 
Okay, I doubt I’ll ever see that scenario play-out in reality.
 
But it became crystal clear that investors lost faith in investment banks, so instead of going the way of Lehman’s, they caught the life preserver from Paulson and will now be regulated banks.
 
They will have stricter limits and more transparency — which I’m guesstimating will also make them less profitable.
 
So what does this mean in terms of trading?
 
While many are understandably scared to touch any financials, I still like the same ones I’ve been mentioning for a while — Wells Fargo, U.S. Bancorp and Bank of America — and continue to do my due diligence on all three.
 
But I’ve heard from some investors, who prefer the riskier spec plays, that they’re eying Wachovia and even the struggling and putting itself on the auction block Washington Mutual — because they feel with the government in the mood for bailouts and taking the bad loans off financials’ hands, that WaMu could be in a good position to get a Paulson & Bernanke life preserver and Wachovia could be in a good position to merge and become a giant with one of the “new” banks.
 
Another stock on my doing diligence on list is Ralcorp, which does a lot of the private label brands you see in grocery stores. My thinking is that many may be more open to buying these cheaper brands in the hopes of saving a little money in the check-out lanes. Ralcorp also owns the Post brand. Interestingly, this stock had just hit my radar screen last week before Cramer named it as his pick on Friday — which means even if I decide to jump on it — I’ll wait for a pullback from the hype, while I continue to do some due diligence.
 
Just remember: Never base any of your investment decisions on anything you read here — do your own due diligence before investing a cent of your money — or hire a professional to do the research for you.
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