Strike Goldman from the List of Potential Citigroup White Knights

There is speculation among investors today that Goldman Sachs & Co. might be Citigroup Inc’s white knight as Citi struggles to regain investor confidence.

It is not happening.

At a recent Wall Street conference Lloyd Blankfein, the CEO of Goldman, was asked whether the investment bank had considered merging with Citi as federal regulators orchestrated the pairing off of major financial institutions in the wake of Lehman Brothers Inc.’s failure. Blankfein did not confirm or deny that such talks took place. He only said this: “Sanity prevailed and nothing came of that stuff.”

He had a wry smile on his face when he said it.