Citigroup, Morgan Stanley talk about merging units

A person familiar with the talks says negotiations are underway between Citigroup and Morgan Stanley about a deal one economist says could be the unraveling of the Citi monolith.
   
Officials at the struggling banks plan to talk about combining their wealth management businesses, in a deal mostly aimed at injecting Citigroup with much needed cash. Citigroup has already accepted two payments from the federal government totaling $45 billion.
   
Christopher Whalen, an economist at Institutional Risk Analytics says if Morgan Stanley ends up buying Citi’s Smith Barney it “sounds like the beginning of a liquidation.“
   
Even before the economic crisis hit, shareholders complained Citigroup was too huge and lagging behind its peers.