Shares of Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) have hit skid row again on no real news. We have inquired around and the culprit is traders attacking the stock. They are using these as hedges on other positions, but there may be more the concerns of this “investment bank turned banker” business model we addressed at 24/7 Wall St.
Specifically, we think this means that Goldman Sachs just might not be as smart as everyone thinks. At a minimum, the investment bank management teams are not that enthusiastic about the future of operations in a de-leveraged environment.
Some fear that Goldman Sachs may have exposure to that crazy trading seen in VW shares in Germany, but that is an unknown event right now.
Goldman Sachs is down over 9% at $84.00 amd Morgan Stanley is down over 16% at $11.50. The good news is that these are off their morning lows. The bad news is that they remain very vulnerable to attack for no new reasoning on any given day.
Jon C. Ogg
October 28, 2008 (10:51 AM EST)