Goldman Sachs downgraded Merrill Lynch today. After getting rid of about 25,000 people in 30 months, selling Merrill Lynch Canada(retail brokerage, mutual fund, securities services businesses, etc) and closing offices in the Far East, Goldman thinks that Merrill has little room to cut cost. However, they upgraded Morgan Stanley today. They believe that Morgan Stanley can still lay off a lot of people. In 1999, companies were gauged according to the amount of revenues(or market share). Then, during the post bubble period, profitability was the king. Now, we have the new metric: room to cut cost. What will be the next metric for upgrading and downgrading ?