The prognosis for Morgan Stanley--once among the mightiest of Wall Street firms, with a rich and proud history--has become so bleak that some are speaking about it as a takeover candidate.

One the possible buyers would be no less than Wells Fargo, a California-based bank that in many ways seems the antithesis of a big Wall Street power firm. Recall that when Wells Fargo bought Wachovia, it acquired a small investment banking operations, one that has fared decently in the middle market. Is now the time to expand the unit aggressively?

"On paper at least, Morgan Stanley looks a good fit. It would bring a top-notch investment bank and, anti-trust issues allowing, create the country's largest brokerage. Trimming 15 percent of the combined brokerage costs would be worth about $2.1 billion to shareholders, once taxed, discounted and capitalized. That's almost three-quarters of Morgan Stanley's current market value," according to Breakingview.

However, cultural conflicts would be an obvious issue. They would no doubt be tricky and rank up there with Bank of America-Merrill Lynch. Such a deal may be worth it, as Wells Fargo would leap instantly into the ranks of elite institutions and make it among the most systemically important. It may not want that dubious distinction. It depends on just how ambitious it is.

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