Blame China, Greece and U.S., Poll Says

NEW YORK (TheStreet) -- A line-up of the usual suspects for the crime of inciting a double-dip in the global recession would include China's property bubble, the U.S. employment quagmire, and the still-unfolding European Union economic woes led by Greece's Mount Olympus-sized budget fiasco.

One could also argue that Goldman Sachs(GS) and the rest of the banks that have helped usher Greece onto the stage of its own economic tragedy deserve a starring role, too.

In the least, the banks are hardly noble warriors, in the mold of Troy's Hector -- though the usual banking-sector hubris does befit a self-important classical hero.

Indeed, the Federal Reserve announced on Thursday that it was investigating Goldman Sachs, and the banking industry, for its role in helping Greece hide the true nature of its debts. At issue is a new twist on the usually suspect derivative instruments that have become the financial industry equivalent of the Trojan Horse hiding weapons of economic mass destruction.

To think, bankers playing with the lives of entire nations as if they were pawns for fickle gods to move around a chessboard with the flick of an obtuse financial algorithm. And the nations being dumb enough to fall for it! Why that could never happen here? Indeed, the derivatives instruments at issue aren't even really new. JPMorgan Chase(JPM) developed the same smoke-and-mirror debt solutions for Italy in 2007.

The point is that, as usual, there are plenty of reasons for investors to remain skittish about the markets -- and just when investors thought 2010 would be the year that an economic recovery took root and the last economic clouds finally cleared.

By Friday, it still wasn't clear if the last act of the Greek Tragedy would be one of resilience or obsolescence. Workers in Greece were out in the streets protesting, and the big rating agencies, Standard & Poor's and Moody's, had both by the end of the week indicated that a downgrade of Greek government bonds might be coming.

The European Union has said it won't step in to help Greece until it sees a legitimate plan from Greece to solve its deficit riddle, with a deadline of March 16. Therefore, one can assume that Goldman Sachs is furiously working with the Greek government to solve the riddle.

On late Friday afternoon, there were reports that a bailout package for Greece led by European banks was being cobbled together.