Goldman, I-Banks Drop on Firm's 'Horrible' November

Shares of Goldman Sachs (GS) fell more than 3% Tuesday following a strong start on the heels of knockout earnings (Goldman Profits on Subprime Shorts, Beats Targets), after the company warned analysts of short-term weakness in the markets, and CNBC reported an unidentified senior Goldman executive called the firm's November "pretty horrible." "September was not good, October saw good business transaction, and November was very difficult," said spokesman Lucas van Praag. Off the record, a more candid senior exec. said the last two weeks of the month "were probably" the worst in Goldman's history. Street sources say the difficulties are related to credit-market issues, perhaps bond-trading losses and writedowns on bonds already on its books. "We're cautious about the near-term outlook for our businesses as we see dislocation in some of the world's capital markets has continued," CFO David Viniar said in a media conference call.

CNBC also quotes unnamed sources who say Merrill Lynch (MER) may have to add another $6 billion to a previous $8.4 billion writedown. Morgan Stanley (MS), which reports Wednesday, is rumored to be looking at another $6 billion asset-related writedown to add to its previously-announced $3.7 billion, CNBC says.

Shares of Wall Street investment banks fell. Goldman dropped 3.4%; Merrill fell 1.3%; Morgan Stanley lost 2.9%; Bear Stearns (BSC), which reports Thursday, fell 1.6%; and Lehman (LEH), which reported a 12% drop in earnings last week, gave up 0.25%.

Sources: CNBC, Reuters
Additional Reading: Short on Bear and Morgan

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