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See What People Are Saying About... Goldman & Morgan

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Heightened concern about the health of big institutions and the need for direct government support has led to some startling ideas.

On CNBC Hugh Hendry, Partner and CIO at Eclectica voiced a huge concern about Goldman and Morgan . He said, “I don't wish to spread alarm but the big issue confronting the market is, I'm afraid, the health and sustainability of Morgan Stanley and Goldman Sachs. It is unimaginable that they can be allowed to go, (but) I suspect that they will be nationalized at some point today or over the weekend," he added.

(Please note that Hendry is known for his market pessimism. Should you like to see the entire interview or his comments in greater context please watch the video.)

If you're wondering how nationalizing Goldman or Morgan is even possible, the Emergency Economic Stabilization Act of 2008’s vague language gives Treasury Secretary Paulson almost unlimited power to intervene and leaves much up to interpretation.

On top of that other market watchers tells us that a government move to prop up an investment bank-turned bank-holding company, such as Morgan or Goldman is all the more likely given the growing consensus that says Paulson and Federal Reserve Chairman Ben Bernanke erred in not rescuing Lehman Brothers three weeks ago, a date which happens to coincide with the beginning of the market’s deep descent.

And that leads to our Fast Money Reader Poll. If the government were to nationalize Goldman and Morgan, will the effect be positive or negative?




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