Neither Goldman Sachs nor Morgan Stanley are having a great time. Both are worth a fraction of what they once were and both may end the year worth less still.
However, both remain prestigious institutions to work for and if you're in the fortuitous position of being forced to choose between the two (and the unlikely situation of knowing little about either), you might want to consider the following points. Personally, I'd always go for Golden Sachs, but I may be a little biased as I used to work there.
1) Upper class vs working class
The cultures of the two banks are very different. Morgan Stanley is aristocratic and upper crust ("white shoe" in Wall St vernacular); Goldman Sachs is working-class boy done good - Alan Sugar, only successful. Goldman is entrepreneurial and has its finger in evey pie. MS was always a corporate finance house (servicing only the most blue-chip of clients, naturally) and a brokerage house, with the rest of an investment bank yolked on to the back of the cart.
2) Bureaucracy vs. shared psyche
Morgan Stanley bankers are the sort of people who would eat sandwiches with knives & forks. Their recruitment process can take ages. GS is known to be collegiate, interviewing exhaustively before making offers. If they want you badly enough though, they will move mountains to get key people to meet you, so that sign-off can be made quickly. MD's will make transAtlantic flights to meet junior candidates.
3) Good vs. better
MS was never quite as good as Goldman. It's just not the same kind of money-making machine as its rival.
4) Rich vs more rich
Goldman's IPO in 1999 made it a legend, creating millionaires overnight of its senior bankers. Although a one-off event, that added a Midas Touch to the firm. If you want to work in PE or hedge funds, it's access Goldman's alumni which will make you real money.
I know personally of a 500m PE fund which, in a first time capital-raising, hit a soft close in eight weeks last year due to cash from GS Partner Managing Directors. Usually this process takes over a year to finish.
If you have an offer from both, it's champagne problems, right? At the end of the day, neither of them are UBS...
The author has worked at Goldman Sachs and interviewed at Morgan Stanley, and is now working on the buyside.