We've discussed the role of Morgan Stanley in the meltdown of Fannie and Freddie. The firm advised Henry Paulson, and in some sense helped cement the Secretary's decision to sound the death knell for the mortgage GSEs. But the New York Times also notes that Paulson's alma mater firm, Goldman Sachs, also played a big role in the ultimate demise of the troubled giants. Freddie chief Richard Syron apparently made a last-minute plea to Goldman Sachs executives in New York, effectively begging for a private bailout plan. But did he really think Goldman would save him? There was just so much uncertainty out there. If the firm invested billions and the Treasury took over the firm, they would lose everything. But when you're desperate, you have no choice. Fannie chief Daniel Mudd did some begging as well--he pleaded with Paulson to spare his firm, which he argued was in better shape than Freddie.  

For more:
- here's the New York Times article

Related Articles:
A statement by Richard F. Syron (press release)
Morgan Stanley on the Fannie, Freddie hot seat