Can Goldman Sachs save the world?

Let's see...

There is much financial news to pore over this morning, but little of it is good, yet stocks are going up.

What gives?

The Associated Press reports that CIT Group is teetering on the edge of bankruptcy, having consulted specialists over the weekend to explore their alternatives during a loss-driven liquidity crisis with little help forthcoming from the FDIC to guarantee their debt.

The company's share price has plunged, but Treasury Secretary Tim Geithner says government help is on the way. It doesn't seem to be helping much.

Bloomberg was running a story about how Asian market shares are the priciest they've been since 2007 when markets began to tumble. That report can longer be located for some reason, but I know it exists - I printed it out about an hour ago to read while on the treadmill.

The news wasn't good - something about high valuations and that investors are paying too much for shares from China, India, and Brazil as the global economy continues to contract.

Reuters filed this report carrying a new warning from the World Trade Organization that the global economic downturn is far from over, recent protectionist measures taken by many countries being more likely to exacerbate the decline than to help individual nations.

Global trade has plummeted over the last year and unless a robust recovery in consumer spending materializes in the West, this is not likely to improve anytime soon.

The Telegraph carries this story about how the Chinese banking system may be nearing a point of maximum expansion, new loan issuance expanding rapidly last month, now around the half trillion dollar mark in 2009, an entire year's worth of lending based on an aggressive expansion launched months ago.

The idea that a good portion of this newly created money has gone into China's equity markets, helping to fuel its 60 percent rise this year, is starting to cause concern.

And then there's this Bloomberg report about how Brazil's currency and stock market are "poised for synchronized declines" based on a plethora of technical indicators that also bode ill for Russia, India, and China.

So much money has been pouring into emerging markets as a result of the widespread belief that they'll be the only regions where economic growth will occur this year, a speedy reversal of this money flow could be devastating.

So, why are equity markets rising today?

Goldman Sachs, according to this New York Times piece.

The word on Wall Street is that the behemoth financial firm, recently characterized as "the great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" is readying a knock-out earnings report for release tomorrow and even Meredith Whitney is tingling with excitement.

It looks like Goldman Sachs is going to save the world.