Posted on 09/17/2008 1:56:04 PM PDT by Anti-Hillary
Morgan Stanley, one of the two last major American investment banks, is considering a merger with Wachovia or another bank, according to people briefed on the discussions.
Morgan Stanley’s chief executive, John J. Mack, received a telephone call on Wednesday from Wachovia expressing interest in the Wall Street bank. Morgan Stanley is considering other options as well. Other banks have also expressed interest in Morgan Stanley.
The talks are preliminary and no deal may emerge, these people cautioned. But if one is reached, it would mark the end of Morgan Stanley, one of the descendants of the original J. P. Morgan & Company.
Morgan Stanley, whose stock plunged sharply on Wednesday, would become the third major investment firm to fold amid the credit crisis. Lehman Brothers filed for bankruptcy on Monday, while Bank of America agreed to buy Merrill Lynch for about $50 billion. In March, JPMorgan Chase agreed to buy Bear Stearns at the urging of the government, as that securities firm teetered on insolvency.
(Excerpt) Read more at dealbook.blogs.nytimes.com ...
So when is Dubai going to swoop in and buy up all of our banks?
Re: “I always liked World. I have very different feelings about Wachovia”
I loved World Savings — for decades. Problem was not with World itself, it was with World’s parent, Golden West Financial, who had all those pesky garbage home loans and Wachovia inherited that mess when it bought Golden West.
Nothing wrong with shorting ....although naked shorts are a different type of beast.
Isn't Wachovia a commercial bank, rather than an "investment" bank like Lehman Bros?
My understanding is that commercial banks have much tighter rules and lending practices than the largely unregulated investment banks, and thus did not go hog-wild in purchasing mortgage backed securities.
Yes, Wachovia has an 'investment' securities branch (similar to Merrill Lynch) but I believe the entire company is anchored much better than a sole investment bank such as Lehman.
IMHO, the “investment banks” got to operate for years in a blissfully unregulated environment, like the banks pre-1929. Now that their irresponsible speculation has led to a panic, they’re looking to merge with a regulated bank with access to government-sponsored insurance like the FDIC.
Getting rid of the uptick rule and the abomination that is Reg SHO are HUGE chunks of the root causes of the current trouble, IMHO. And yes, Glass - Steagell was a fine idea whose time did not pass.
The thing that is starting to concern me is that the SEC and FINRA were far outside the event loop over the last two years and it looks like the Fed slipped outside the event loop sometime between March and last week.
I figured last February that the stakes this game were for the system and individual institutions be dammed. Its looking to me like too many individual instutions are adding up to a threat to the system. As an upthread post mentioned, when people starting joking about canned goods and ammo, we are closer to a panic fueled melt-down than I am really comfortable with.
Thanks for the info. I do not know who owns what anymore, in the financial area. Holding companies in the shadows. I guess.
yep...naked anything is really a problem in investments
Could you explain this? Although I could probably google it, I prefer the FreeperPedia :)
It seems that there are 2 different culprits involved in this mess. One caused by govt. insisting loans be made to people that were marginal at best. The other the "I'm so clever crowd" that over inflated commercial properties. It would be great to know how this breaks down.
Boy I hope McCains campaign read your post, it is right on target.
This election has gotten more and more important every day.
If McCain wins we have chance that the banking system will be reformed and remain a private industry with govt. regulation. If Obama wins expect Fannie Mae and Freddie Mac to be govt. bureaucracies and all commercial/investment lending under govt. control. IOW, free enterprise vs. fascism.
You’re right - naked shorting has been a HUGE problem!
The SEC (Securities & Exchange Commission) is unquestionably partially responsible for the recent volatility and drop in the stock markets. They have done a terrible job protecting American investors and need to be reprimanded loud and clear by the Senate Banking Committee.
Here are some of the most glaring problems with the SEC that need to be addressed immediately:
1) On, July 6, 2007 the SEC got rid of the Uptick Rule regulating short sellers which had been in place since 1938 because of short selling bear raids during the Great Depression. Since the Uptick Rule was taken out, the volatility on the stock market has increased by 70% as measured by the VIX Index.
2) On November 2, 2007 the SEC allowed the NYSE to get rid of the Program Trading Curbs that had been in place since the 1987 stock market crash. The NYSE formerly implemented a curb on program trading whenever the NYSE Composite Index moved 190 points or more from its previous close, and permitted program sales to be executed only on upticks and program buys on downticks.
3) TODAY, SEPTEMBER 18, 2007 FINALLY - The SEC has issued a ruling to stop the abusive and criminal practice of Naked Short Selling, which is simply counterfeiting the shares of publically traded stock. WHY DID IT TAKE THEM UNTOLD YEARS AND A FINANCIAL CRISIS TO DO THIS???
These are major problems that NEED TO BE FIXED IMMEDIATELY BY THE SEC. These problems have resulted in a massive amount of increased volatility and instability in the equity markets, reducing the net worth of American investors, driving companies out of business, substantially raising the cost of capital, and costing American taxpayers billions in government funded bailouts.
Because the SEC is regulated by the Senate Banking Committee, I urge FReepers to send letters & emails to the Senate Banking Committee demanding that the SEC reinstate the Uptick Rule and Program Trading Curbs, and ensure that the criminal practice of Naked Short Selling is truly stopped once and for all.
In addition, a full investigation needs to be made into corruption at the SEC - and some heads definitely need to roll at the SEC for their gross incompetence.
The thing is, I’m sure McCain will point out that 0bama only promises more taxes and more spending, he points that out at every opportunity he has, just like all goof Republicans do when running against any Democrat.
But what McCain needs to do is take it a step further. He needs to explain why we cannot afford that now. Our government is out of money, in massive debt, and the bill collectors are calling. If our government’s spending habits are not drastically altered and put on a very restricted allowance, it will become insolvent, and it will take the US economy down with it. Savings will have no value. Zero. Commerce will break down completely. It will be a collapse along the lines of the Soviet Union. This is where our government is heading on its current trajectory. McCain is going to have to make this case and lay out his solutions then ask the American people if they trust this kid from out of nowhere with the future of our country and our economy. The American people deserve to know what’s happening and be given a fighting chance to stop it.
After 8 Pollyannaish years of Bush, what we need is some Straight Talk. That is how McCain can separate himself from Bush, and seize the mantel of leadership from both Bush and 0bama.
IMO the best move is to hold. Let this get sorted out before doing anything rash. I wondered why, after the AIG bailout, why the market rose slightly then fell again. I told my wife I thought it was because there may be more big financial houses in trouble and Wall Street knows it. Looks like I was right.
In addition to everything else going on in the rarefied world of finance, it looks a like lot of investment companies were up to their eyeballs in “naked” short sales. Not sure exactly how it works, but it involves a way to make money on a stock’s decline. Apparently SEC has put new rules in effect to stop these transactions.
I’m still waiting for the people responsible for abusing the trust of their investors to be criminally charged, tried and sent to jail.
Dean Witter is part of Morgan Stanley.
Dean Witter is part of Morgan Stanley.
Will they become too big to fail?
They were bought by Lehman.
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