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Morgan Stanley, Goldman both internally bankrupt – can Paulson rescue them with $200 billion cash infusion?
Joe Weinman
Oct. 11, 2008
Paulson, in a statement yesterday, said the U.S. would purchase equity in a ``broad array'''' of banks and other financial firms to restore market stability and ensure economic growth. The Treasury is working on a ``standardized program that is open to a broad array of financial institutions,'''' he said.
Sources say close $200 billion will just go to keep Morgan Stanley, Goldman out of bankruptcy. Both are trying to manifest their worth of collaterals on hand but no one believes them any more.
Morgan Stanley Chief Executive Officer John Mack, 63, and Goldman Sachs CEO Lloyd Blankfein, 54, failed to regain investor confidence by converting their firms into bank holding companies last month and raising new capital from private investors. Morgan Stanley's stock dropped almost 60 percent this week, while Goldman's fell 29 percent.
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