Tell that to Iceland.

I think I know why you picked that example, but it does not support your case. ;-) Iceland's crash was caused by loss of liquidity and the resulting bank runs. Sound familiar? ;-) As expected, it caused a financial collapse with government forced to step in too late to take over the whole Icelandic banking industry. While this is useful as an example of what the US government wanted to prevent by forcing liquidity and confidence back into the failed US sector, it has nothing at all to do with what G-S was about. It was just another set of silly bankers building up impossible liabilities to make a short-term profit.