Rumor is they're merging. I haven't seen such a natural match since Lisa Marie wed Michael Jackson.
The real question is, who's left for Goldman? If Morgan Stanley goes, I don't see how Goldman can survive. But they're kind of running out of commercial banks to woo. Couldn't Wal-Mart use an investment banking arm?
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That last question should be taken seriously! Recently, Wal-Mart applied for some sort of banking license in Canada. I guess the same license in the U.S. was pending for a couple years around 2002 before Wal-Mart withdrew the offer. We get everything else at Wal-Mart, why not a loan?
I'd love to see all the Goldman guys have to move to Bentonville, AR. That sounds like the premise to a bad sitcom.
Leaves Wells Fargo... why do I get the feeling that they have been waiting for just this opportunity for the last three years?
This seems kind of reminiscent of some sad old singles bar at last call.
I'm pretty sure Wal-Mart was going after the retail banking (especially credit card processing) market.
Wachovia looking to get "too big to fail"?
Who the hell knows anymore? I was under the impression that Wachovia was one of the commercial banks that was in the most trouble.
Maybe I'm dumb -- why is being the only large independent investment bank impossible for Goldman? They aren't in bad shape right now. How does this make their business unviable?
This seems kind of reminiscent of some sad old singles bar at last call.
I hope anyone doesn't take this the wrong way, but I used to work with a creepy guy. His rule was "Go fat early" His reasoning was he didn't want to go to a bar, spend a bunch of money drinking, only to find out it's only dudes left at the bar.
WPH, I disagree. That sounds like the premise to a great sitcom. High concept: '"Sex and the City" meets "Green Acres" meets "The Office"'.
How do you get from Goldman Sachs to Sex in the City?
Though given the fallout from the mortgage bust it does look like IBankers have fucked just about everyone in sight.
What does this get them, may I ask? Wachovia is effed too. If you put two stinking piles of shit together, you don't get a dozen roses, you get a bigger stinking pile of shit.
That said, I think Morgan Stanley and Goldman Sachs would be just fine if not for the short selling. Earnings were fine. Balance sheets are fine. Both banks adequately pre-funded into 2009.
But now Morgan Stanley is in play, and not even a perfectly fine Goldman can survive alone. The market gives them a lot of credit, much of it well-deserved, for just being better than everyone else. But not enough credit to believe they're the sole exception to a failed business model.
This is really sad, really. It's the end of an era.
Given where this era has taken us, I don't see why we should reminisce about it.
I mean, sure NY will suffer dearly with all of the investment folks gone, and will have to compete for employers like all other cities, but there were some seriously dysfunctional things going on (hence the meltdown). Arrogance, greed, disdain, etc. These aren't good, and yes, I'm glad on some dark level that this has hit.
Of course, my retirement account, such as it is, shows some hurt. And working for a maturing start-up, my employment could very well be effected by this. I will not come through this unscathed, despite having lower levels of arrogance, greed, disdain, etc. Life isn't fair, and I don't expect the government to make it so for me.
What's to stop Goldman selling itself outside the financial sector anyway? "Goldman-Google" has a ring to it...
While I suspect Morgan Stanley will ultimately woek out something with a foreign bank, I wouldn't exactly call either them nor Wachovia "stinking piles of shit". True, Wachovia has Golden West hanging like a millstone around its neck, but it also is sitting on some $ 300bn of low-cost deposits. And Morgan Stanley has a fairly solid balance sheet, they're just being dragged down by the market's overreaction.
Tie two rocks together. See if they float.
Given that Morgan Stanley is worth more (even after yesterday's meltdown) than Wachovia I wonder who would really be buying whom. Also, some of these rumors may be deliberate attempts to pump the stock price back up and defeat the short-sellers.
I hope anyone doesn't take this the wrong way, but I used to work with a creepy guy. His rule was "Go fat early" His reasoning was he didn't want to go to a bar, spend a bunch of money drinking, only to find out it's only dudes left at the bar.
Breaking news: we're all creepy, some of us just hide it better. You're creepy guy's logic is solid, noone likes a sausage party.
Goldman being Goldman, I see them either quickly acquiring some troubled second-tier bank and announcing that they're all set... or waiting for their stock to tank and buying themselves out, thus ending their term as a public company for the time being.
I don't see them allowing themselves to be "bought" by anyone, no matter how bad things get.
Eehh... just tack Goldman onto the Fed... I hear it's always looking for another good buy. Just tell me which chair in the boardroom is mine.
John, the problem won't be Goldman's stock price; it will be Goldman's credit. If it's the only remaining standalone investment bank, how willing are people going to be to roll over credit lines to a firm whose business model has blown up spectacularly four times?
If you put two stinking piles of shit together, you don't get a dozen roses, you get a bigger stinking pile of shit.
Not according to the credit rating agencies. If you take toxic loan pools, slice them up, and combine those slices with slices from other toxic loans pools you get AAA rated paper.
How would an acquisition by Wal Mart help? Wal Mart only has assets of $166 billion. Goldman already has assets of over $1 trillion.
Megan: I think you may underestimate the soothing effects of Goldman's aura among those on the other end of those credit lines. Remember, it's a very old business model that only blew up recently because three (not yet four) players let leverage get out of hand. (MS has NOT "blown up" as of this writing. They are caught in some hysteria. Whether that hysteria will inflict fatal damage is very much, as of 11:17 EDT, an open question.) It is not impossible that GS really is in more-or-less fine shape and it's not impossible that they'll be able to keep the balls in the air long enough to get through a near-term credit contraction.
They may have to make some very private deals with the devil (or Abu Dhabi, or worse) to do it, but I can certainly see it working out that way.
HSBC
I would love RBC to do it but I don't think they are quite large enough.
I believe the Morgan Stanley is in a good shape. Despite its string earnings, I am not sure why ut should be so afraid if this market. also in one of the news feed i read that the CDS spread fell, which implies that it is ina good shape w.r.t the liquidity.
one more thing i am wondering is why not MS take the capital if required from the fed which just pumped billions of dollars, why looking for a merger.
I think it is just giving an impression that some this is wrong with MS, behind the scenes.
"What's to stop Goldman selling itself outside the financial sector anyway? "Goldman-Google" has a ring to it..."
Why not Exxon Mobil Goldman? Having as a parent company one of the few remaining ones with a legit triple-A credit rating would be sure to lower Goldman's borrowing costs.
JordanT -- Yeah, but, as happened to AIG, if you're dumb enough to actually operate on those "AAA pieces of paper" composed of slices of shit, then the same rating agencies that did the magic shit-to-AAA conversion will shoot you deader than dead.
After all, they have standards. Just not when they're getting paid to ignore them.
I kind of like the idea of Goldman investment bankers sharing rooms at local Motel 6 hotels in order to stay consistent with the Wal-Mart culture.
Plus - I think it would be great for Wal-Mart to force Goldman employees to get up every morning and shout about what new products they are offering, and why they are such a good deal. Plus - can Wal-Mart lock the investment bankers in the office buildings over-night when they need them to work harder?