Tilted Forum Project Discussion Community - View Single Post - meanwhile, back in reality (bank crisis round 2)

Tully Mars · 09-17-2008, 01:06 PM

Quote:

Originally Posted by jorgelito

Good lord, I don't know. Do you think Morgan Stanley and Goldman Sachs could be next?

I do think CitiCorp/Group could be next.

Hopefully it won't be an endless fall of dominoes.

Sadly, yes I do-

Quote:

Shares of Goldman Sachs and Morgan Stanley plunged on Wednesday, a sign that investors fear they can't survive in their present form as the last two major independent investment banks.

Executives of both companies insisted a day earlier, when they were reporting profits for the most recent quarter, that they do have the financial wherewithal to go it alone.

But analysts said the question increasingly is whether continued market turmoil could force them to acquire or be acquired by commercial banks, whose deposit-taking operation would provide a stable source of funding.

Morgan Stanley shares fell as much as 44 percent Wednesday and were off about 25 percent in late afternoon trading. Goldman Sachs shares shed more than 35 points before narrowing their loss to about 14 percent.

Anxious investors also continued to bid up the price of protecting against a default of debt issued by the two investment banks. The spike in credit default swaps has fanned fear gripping Wall Street that the investment banking model is in jeopardy of extinction.

The Associated Press: Shares of Morgan Stanley and Goldman Sachs plunge