Goldman Sachs Shares Morgan Stanley’s Pain as Prospects Darken

Goldman Sachs Group Inc. and Morgan Stanley may find that cutting more than 11,500 jobs, eliminating executive bonuses and reining in risk won’t help shareholders enough as the companies face another year of slumping revenue.

The Wall Street that the two New York-based firms dominated for decades vanished in September, when Lehman Brothers Holdings Inc. went bankrupt and Merrill Lynch & Co. sold itself to Bank of America Corp. Goldman Sachs and Morgan Stanley became banks and took $10 billion each from the U.S. government. Reversing their revenue slide next year will be difficult as the worst financial crisis since the Great Depression limits demand for investment banking services.

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Plus the revelation that Ponzi schemes lie behind some of the most trusted investment services won't help.

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