Goldman Sachs (GS: sentiment, chart, options) lowered the boom on bank and brokerage stocks today, cutting its profit estimates for the sector. GS stated, "We expect third-quarter results will be hampered by declining global equity markets, further deterioration in mortgage assets, and slower levels of corporate and institutional activity." This led to GS lowering its third-quarter and full-year estimates on Morgan Stanley (MS: sentiment, chart, options) , Lehman Brothers (LEH: sentiment, chart, options) , J.P. Morgan Chase (JPM: sentiment, chart, options) , Citigroup (C: sentiment, chart, options) , and Merrill Lynch (MER: sentiment, chart, options) . GS noted that, although banks are aggressively unloading assets to raise capital and solidify their balance sheets, no immediate improvement is seen.

GS also stated, "Once again, the majority of our negative estimate revisions are being driven by higher-than-estimated write-downs on mortgage assets ... In addition though, we are also seeing results being negatively impacted by slower levels of client activity and expenses and fines from auction rate securities." The brokerage believes that any significant recovery "is still a few quarters away."

GS's assertions are just the latest tribulation to befall financial stocks this week. The concerns were kicked off over the health of Fannie Mae (FNM: sentiment, chart, options) and Freddie Mac (FRE: sentiment, chart, options), and whether the lending giants will need to be bailed out.