As with Nixon so with Goldman Sachs; it is not the fraud but the cover-up which will hurt its business and finances, and bring down the house.

The defence Goldman and its legal advisors came up with amounts to a claim that every sophisticated player in the market knew that it was allocating collateralized debt obligations to satisfy short-sellers, and moreover that other investment banks were doing the same thing. Were these claims true, there would have been no reason to hide or cover-up the role of short-seller John Paulson in placing his favorite candidates for collapse into designated CDO tranches. The prospectus would have spelled this out rather than pretending that a neutral outside body was allocating mortgages into different risk categories.

With the Dow over 11,000 still, the market here has further to fall. It is helped along by global news. Toyota is having to pay another great lump of money for safety failures and withdraw more lines from the market. China’s latest measures to try to pop the threat of a housing bubble drove down that market. Thailand’s crisis has reached a peak with armed troops guarding downtown Bangkok. The Kirghiz crisis risks fomenting a civil war between the North and the South.

And Europe is grappling with an ash crisis from Iceland while still trying to cope with a cash crisis from Greece. You can expect claims and suits from Britain and Germany, home of the leading Goldman victims: IKB in bankruptcy and ABN-AmRo-taken over by Royal Bank of Scotland and bailed out by the UK government.

There will be US political impact from the Goldman civil fraud charges coming just now in the run-up to financial reform regulations and (oh yes) the midterm congressional elections. Wall Street, taking a leaf from Goldman’s claims, will drop on expectations other US and maybe Swiss investment banks will also face investigation and claims.

I expect to fly back to NYC on Tuesday. But I am not doing much packing. Unlike most stranded passengers, we have a pied-`a-terre with beds and a kitchen and Internet (of sorts) so we aren’t going bankrupt because of the flight bans and delays.

The Internet is of sorts because Mudchute Manor is located in the doughnut and not the hole. When Canary Wharf went live 20 years ago, a new telephone exchange of the most modern sort was created for the financial center by BT, the local fixed line telco. But the rest of the Isle of Dogs (where our base here is) was left to the antiquated Poplar exchange which covers the non-skyscraper areas along the Thames. Internet links via ADSL keep cutting off to keep me on my toes.

By Christmas 2010 (when I surely will have flown home to New York), the doughnut will be rewired for fiber-optic cable. I may even abandon Sky (Rupert Murdoch’s first great money-spinner) which brings television to my home from a satellite.

More for paid subscribers, some from the USA, follows about British, French, Japanese, Brazilian, Dutch, Portuguese, and Israeli stocks.

*The US FADA will shortly deal with Global Investing Pro French share Stallerg`enes (STLEF) which has successfully completed its first US phase III trials for Oralair, a sub-lingual desensitizing product against grasses pollen (including the evil ragweed). The VO61.08 trials, so-called gold-standard (double blind) for 5 grasses allergens, were run by STLEF itself. Currently the co. sells a standard injectable desensitizing program (ASAD Retard Pollen5) in the US, not special as the no-jab one. Related to the US trials, Stallerg`enes now has a US ticker symbol, so it is going into the standard Model Portfolio now.

Your editor when she moved to France for the first time developed allergic sneezes to pollens she was not used to in post-chestnut blight USA. To avoid this young mother having to go weekly to the only Paris allergy clinic, my husband gave me the shots (in my thigh, easier than the upper arm) using desensitizing material we could buy in France and throw-away needles we had to smuggle in from Switzerland. We also had a French drug for any extreme reaction so he could jab that one too. So I am a great expert on French allergy medicine, which has come a long way in 40 years from being viewed as an American excess.