Since the bloodbath on wall street began almost every major piece in the press has mentioned Goldman as the shining example of great risk management. All these articles imply that other firms do not have practices, people, or a risk management culture that apparently Goldman possesses. However, no one has come out and said what exactly Goldman does that differentiates it in risk management. Two recent articles got the Prince thinking about this omission, specifically Portfolio’s article about John Thain where they constantly talk about Goldman’s risk prowess and then Dealbook’s comment on the portfolio profile referencing what the editors call "The Goldman Effect".  So, does Goldman really have superior risk management processes or is the financial press just inferring this from the outcome I.e. Goldman didn’t lose money on mortgages? Do they have the better risk metrics and strategies that current financial media heartthrob, Nassim "the Dream" Taleb, says wall street needs to create (by the way, the prince thinks Mssr Taleb is long complaints but short solutions on risk management but more on that later in the week when the prince takes a look at Fortune’s, Bloomberg Markets magazine’s, and bloomberg’s coverage of baserm and his 2007 book, The Black Swan).

The prince doubts that Goldman does risk management better than other firms or they have a secret edge.  Yes, they were right last spring and summer when others were wrong but that may be nothing more than a great call not an active choice to reign in risk.  Yet, nothing about a large short various tranches of the ABX trade necessarily screams that they have a risk management edge over other firms.