Shortly after the close of the market tonight we received the following over the wires:

BERKSHIRE HATHAWAY TO INVEST $5 BILLION IN GOLDMAN SACHS; IN ADDITION GOLDMAN TO RAISE AT LEAST $2.5B IN COMMON STOCK OFFERING - FORMAL RELEASE

- The Goldman Sachs Group announced today that it has reached an agreement to sell $5 billion of perpetual preferred stock to Berkshire Hathaway, Inc. in a private offering.
- The preferred stock has a dividend of 10 percent and is callable at any time at a 10 percent premium.
-  In conjunction with this offering, Berkshire Hathaway will also receive warrants to purchase $5 billion of common stock with a strike price of $115 per share, which are exercisable at any time for a five year term.
- Goldman’s CEO says “This investment will further bolster our strong capitalization and liquidity position.”

Wow, now that is a big plunge to take. We also know that Goldman recently changed their status to a Federal Bank Holding company this past Sunday. And they were even allowed to obtain the status immediately without the normal 5 day antitrust review process (LINK HERE).

So within just a couple of days after Goldman Sachs becomes a bank holding Company, and allowing them to tap the Federal Reserve for more money now as they will be able to access the alphabet soup of lending facilities from the Fed. It would appear that Goldman will be on a quest to be the nations largest bank. Already rumors are circulating that Goldman Bank will buy up the remaining IndyMac (who went into default last month) and would have an immediate presence in Southern California.

The initial reaction of this Warren Buffet/Goldman Sachs news was a jump in the after market S&P futures.

 Will this be a catalyst for any substantial market rally? I think not, but we’ll have to wait and see what the market hedge funds make of it tomorrow. We are still stuck in some relatively significant support/resistance levels on the major indices (see our recent charts).