If you want an explanation on why GS and MS are in free fall, look at the money markets. After the Reserve Fund broke the buck yesterday, money market funds are increasingly wary of lending to investment banks in the short term repo markets. The TED spread has also spiked up to record levels (The TED spread indicates how willing banks are in lending money to one another)

This is like the 1907 money market panic. GS and MS could be solvent but cannot stay in business if it can't access funds easily in the overnight markets since they don't have a stable deposit base like commercial banks do and they are almost entirely dependent on the repo markets for funding.

Should we be expecting another bailout from the government soon?