We extend greetings to our Chinese overlords

No comment is necessary on this CNBC report, I don't think.

Morgan Stanley -- one of the two last independent, U.S.-based investment banks -- is negotiating with the Chinese government for a fresh infusion of funds into the beleaguered investment bank.

Morgan Stanley CEO John Mack held various conversations with potential merger partners Wednesday afternoon including top executives at Citigroup and Wachovia Bank . However, Mack continues to work to keep Morgan Stanley an independent company CNBC has learned.

Executives at Morgan are currently crunching numbers to determine how much of an additional minority stake they need to sell to settle market fears about the company.

Mack's plan is to sell a piece of Morgan Stanley to a Chinese bank. Mack has been dealing with Chinese government officials all day Wednesday to line up money from China.

He also has been dealing with top officials from the Federal Reserve and the Treasury to lobby them to give approval to a Chinese bank increasing its stake in the company.

China’s sovereign wealth fund, China Investment Corporation (CIC), already owns 9.9 percent of Morgan. However, Mack, according to people close to the company, understands that he faces significant obstacles including a turbulent market that has crushed Morgan shares.

People close to Mack say that he does not expect any deal tonight and he would like to avoid one on Thursday. However, if he has to do a deal, because of further deterioration in stock price he will.

CNBC's David Faber had earlier reported that the Federal Reserve has been active in encouraging the Chinese to invest in U.S. financial institutions. The Fed has even made it clear that it would look favorably upon a Chinese acquisition of a U.S.-based financial institution, sources said.

Morgan Stanley stocks plunged more than 24 percent Wednesday and it is imperative that the investment bank gets a cash infusion before its shares decline further. London-based HSBC has also been cited as a possible suitor for Morgan Stanley.