Goldman Sachs (GS) and Morgan Stanley (MS) Shares In Free-Fall

There is a bloodbath today in shares of the last two remaining big independent investment banks, Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS).

Today's selling comes on the heels of better-than-expected Q3 results from both companies yesterday. But, as the selling indicates, investors are very worried about the future of both companies due to the seizing up of the credit markets. Both companies rely on short-term borrowing, which has seen spreads blow-out following the collapse of Lehman Brothers, the bailout of AIG, and now problems after a large money market fund 'broke the buck.'

The credit-default swaps on both companies rose for the third day in row, indicating heightened risk of failure. Credit-defaults swaps on Morgan Stanley rose 220 bps to 900 bps and swaps on Goldman rose 110 to 530.

At 11:50AM ET, shares of Morgan Stanley were down 33% to $19.16, but hit a day low of $16.08. At the same time, shares of Goldman Sachs were down 20% to $106.31, with a day low of $101.87.

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