Reuters reports that Merrill Lynch analyst Guy Moszkowski recently met with Goldman Sachs executives, including the firm's Chief Financial Officer David Viniar. He has made some interesting observations following the meetings.

Moszkowski noted that Goldman appeared to be 'obssessed' with liquidity, as the firm wants to ensure that it is never vulnerable to a Bear-like fall, or to the speculation that is currently making life so difficult for Lehman Brothers. The Merrill analyst also said that Goldman could acquire a (probably fairly small) US deposit-taking bank to help fund its businesses during times of market turmoil - provided that such an acquisition didn't stop it from undertaking it traditional money-making activities.

The Times reports that Cassa di Risparmio di San Marino, a small bank in the Republic of San Marino, has taken legal action against Barclays Bank, seeking $267.7m in damages for actual losses and lost income in connection with the sale of CDOs by the bank and two of its affiliates. The complaint has been filed in the High Court in London.

Bloomberg reports that analysts are now speculating that Wachovia's new CEO, Robert Steele, may put Wachovia Securities, the firm's brokerage unit, and Evergreen mutual funds up for sale, as he comes to grips with life at the troubled bank. CreditSights Inc. analyst David Hendler says that the retail brokerage unit and asset management business could fetch up to $15bn in any sale. Wachovia, however, says that it remains committed to these businesses and has no current plans to put them on the block.

The news agency also reports that a spokesperson for Landesbank Berlin has come out to quickly shoot-down speculation that the bank is likely to be involved in a merger deal with WestLB. The spokesperson said that: 'Landesbank Berlin is......not available for consolidation among the Landesbanken'. There you are, then.

Finally, The Wall Street Journal reports that several hedge funds are among investors weighing opportunities to acquire debt products at distressed prices, a sign that many think that we have finally hit bottom. One irony, however, is that the newspaper says that some investors have hired investment bankers for advice on valuing some of the more complex products available to buy - 'ignoring the fact that these bankers helped cause the mess by developing (these kind of) products (in the first place)'.

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