People are correct when they point out that the market is forcing the stronger investment banks, Goldman Sachs (GS) and Morgan Stanley (MS), to do a deal with a deposit institution even though they are making money and aren't liquidity strained. It is a shame, but when your business model requires short-term funding sources from the market, and at the same time the market is crushing your stock based on fear and not actual problems with your business, you might have little choice.

Today we are hearing that Morgan Stanley is talking with several parties about a capital investment or an outright merger. Wachovia (WB) is on the short list of potential merger partners. If Goldman and/or Morgan are forced to do a deal by the marketplace, you can bet that the buyer will be getting a steal (like the one many thought Ken Lewis could have gotten if he waited a day or two to buy Merrill Lynch).

The result is that investors should look at any deal for Goldman or Morgan as a potential opportunity. The Wachovia story is interesting because they clearly have their own issues to deal with right now (notably $120 billion in Pick-A-Payment mortgages in California they are trying to rework with borrowers). A bank like Wells Fargo (WFC) would be in much better position to take on one of the two remaining investment banks, or a troubled bank like Washington Mutual (WM).

At any rate, any deal for GS or MS done because of market reaction and not on business fundamentals is likely going to be done at an absolute bargain basement price (even better than the Merrill Lynch deal).

Full Disclosure: No positions in the companies mentioned at the time of writing