By Dan Ferris in the S&A Digest:

Bank analysts and shareholders, drunk on Mr. Market's heavily spiked "Garbage Rally Punch," aren't satisfied with Goldman's "too big to fail" status, its obvious political connections, and its ability to commit fraud in broad daylight and get away with it. Now, they want to know when the bank will - we are not making this up - increase leverage to goose returns. Goldman's assets are currently 14 times its equity, down from a historical factor of 20 and a peak of 26.

Naturally, Goldman declined to comment on the leverage question in a recent BusinessWeek article.

The question is an odd one to ask today, just as Treasury Secretary Herr Geithner was expected to propose "too big to fail" banks be required to maintain larger capital cushions... which has the polar opposite effect of increasing leverage, reducing returns. Goldman must know something like this is coming.

If you ever wondered if Mr. Market is truly manic depressive, the call for higher leverage among large financial institutions at this particular moment in history must surely erase all doubts. Mr. Market had a knife at his wrists in March. Now he's aiming the champagne corks at the crystal chandelier, and banks want to party "like it's 1999," in the words of Swedish finance minister Anders Borg.

Crux Note: Dan Ferris is the editor of Extreme Value... and he's currently recommending one of the safest and most lucrative investments you can make in the gold industry—yet it has nothing to do with mining stocks... or gold mutual funds... or gold bullion. Learn more about Extreme Value here...

More from Dan Ferris:

The one group of stocks you should sell immediately...

Dan Ferris: These 3 indicators say the market is expensive

Dan Ferris: If you want to learn a lot about investing in a very short time, read this