Goldman, Morgan Stanley flee into Fed's arms.
WASHINGTON (Reuters) - Goldman Sachs and Morgan Stanley sought shelter with the Federal Reserve to survive a financial storm that destroyed their rivals, effectively killing Wall Street's investment banking model of the past two decades.
The move is Washington's latest effort to restore calm to chaotic markets and follows frantic talks between the Bush administration and Congress on a $700 billion bailout to prevent the crisis from pushing the economy into severe recession.
By agreeing to much tighter Fed regulation as bank holding companies, Goldman Sachs Group Inc <GS.N> and Morgan Stanley <MS.N> moved to avoid the fate of rivals that either collapsed or were taken over in the worst financial crisis to sweep Wall Street since the Great Depression.
U.S. stock futures were indicating a lower opening on Wall Street, while European stocks edged higher, the dollar fell and U.S. Treasury debt prices edged up as investors played it safe before the mechanics of the plan are worked out.
"We need to see more details from the rescue package. What is missing is the price the U.S. authorities are going to pay for the toxic assets," said Heino Ruland, analyst at FrankfurtFinanz.
Goldman and Morgan Stanley shares traded in Frankfurt down around 6 percent.
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remember, that the fed is actually controlled by private bankers............