There's Still Gold(man) In Them Thar Hills

In the wake of Lehman's (NYSE: LEH) bankruptcy and Merrill Lynch's (NYSE: MER) rush sale, investment banking has seen better days. But today, Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) showed the world they can still make money.

Goldman Sachs reported Q3 EPS of $1.81, 10 cents better than the analyst estimate of $1.71. Revenues for the quarter were $6.04 billion, versus the consensus of $6.23 billion.

Morgan Stanley reported EPS of $1.32, well above the analyst estimate of $0.78. Revenues for the quarter were $8 billion, also well above the consensus of $6.32 billion.

The credit default swaps for Goldman and Morgan Stanley have seen huge jumps lately, indicating heightened risk of failure. These results from the two remaining large independent i-banks will likely calm down those fears.

And what about speculation the two will have to merge with a deposit bank to boost liquidity? NOT! Both companies addressed the rumors on their respective conference calls today, saying it's not going to happen.

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