That $180 billion central bank injection was enough to stabilise the broader market for a few minutes…but not enough to calm down Goldman (GS) and Morgan (MS) clients and investors. Both stocks are down hard.
This presumably means that Morgan’s hot-and-heavy talks with Wachovia (WB) are proceeding apace. And we suspect that even within the offices of the fiercely independent Goldman some are urging an immediate shotgun wedding.
Some of the firms’ clients, meanwhile, are fretting about what to do. Here’s how a hedge fund manager just described the current smart-money debate about how to handle prime-brokerage relationships.
Here’s a sample conversation among hedge fund managers these days: “Should i diversify my prime brokers by adding ___ (fill in the blank)? Or is that just creating more risk?” Answer? No one knows.
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