Reports Goldman Sachs (GS) Talked With Citigroup (C) About A Merger

According to reports from the Wall Street Journal, venerable investment bank Goldman Sachs (NYSE: GS) quietly approached Citigroup (NYSE: C) about a possible merger in September following the collapse of rival Lehman Brothers and the bloodbath in the shares of the last standing larger i-banks Goldman and Morgan Stanley (NYSE: MS).

Apparently, Goldman's CEO Lloyd Blankfein called Citi's Vikram Pandit, following the Sept 15 Lehman bankruptcy, and the two talked briefly about a deal. The talk didn't result in any action or further conversations and later Goldman announced a large preferred share investment from Warren Buffett and a large common stock offering. In addition, the U.S. Treasury decided to inject billions directly into financial companies, including Goldman.

Still, the call from Goldman to Citi underscores the severity of the financial crisis.

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