Merrill Lynch hardly failed in a free market manner. It was bought out based on guarantees from the taxpayers IIRC. GS also got help from the SEC in the form of

Merrill Lynch hardly failed in a free market manner. It was bought out based on guarantees from the taxpayers IIRC. GS also got help from the SEC in the form of a temporary ban on shorting. I'm not saying you're wrong, just that you've over-simplified the situation... there really aren't any free markets when it comes to finance.