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To: GST who wrote (120844)	3/19/2001 1:37:28 AM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Gst, this is the best news I've heard in over a week the sluts are going down sometime in the future! Btw The moral to the story is never short a slut unless you have balls the size of a bull! >Published: March 18 2001 18:06GMT \| Last Updated: March 18 2001 23:16GMT The state of investment banking is bad, but this week's earnings reports from Wall Street securities companies are unlikely to tell the full story of the industry's woes. Goldman Sachs, Morgan Stanley Dean Witter, Lehman Brothers and Bear Stearns are all expected to say their earnings fell sharply in the three months ending in February. Goldman reports on Tuesday, the other firms on Wednesday. The difficulties faced by these companies are well known: equity issuance and merger activity have slowed, venture capital profits are evaporating, January's bond market rally has lost steam, and individual investors are growing cautious. However, analysts said the earnings reports will benefit from deals done during the boom. Many mergers and acquisitions announced last year only closed during last quarter. "There were a lot of mergers that were announced last year, which are paying off now," said Guy Moszkowski, Salomon Smith Barney analyst. The danger is that the current lack of M&A activity will translate into lower fees later this year. "The environment looking over the next couple of quarters will be tougher," said Mr Moszkowski. "That's the issue." First-quarter revenues could also be boosted by good showings in trading and derivatives departments, which can benefit from market volatility. "All this volatility has made customers really want to unbundle their risks," said Richard Strauss, Goldman Sachs analyst. "The growth of the derivatives business is being driven by the choppiness of the markets." Firms also will be able to protect profit margins by squeezing expenses. Analysts suspect Goldman Sachs and Morgan Stanley will do this better than competitors who were offering more guaranteed bonuses to attract talent. Still, a brutal February spurred several analysts to cut their earnings estimates for investment banks in recent weeks. "I tend to think that earnings for the next quarter will be worse than people think," said Judah Kraushaar, Merrill Lynch analyst. "Activity has gotten very quiet." Analysts surveyed by First Call, a Thomson Financial company, said Goldman would report $1.29 a share in first-quarter profits, compared with $1.76 the year before. Morgan Stanley's earnings per share were expected to fall to $0.93 from $1.34, Lehman's to $1.37 from $1.85 and Bear's to $1.28 from $1.89.