As someone close to the fire, the down mood on Morgan is bull. They may indeed be forced to sellout but it is because of short selling and panic and thats the story. It is a very solid company with the most transparent books on Wall Street. The SEC lets the short sellers run wild and sink good companies - they have 180 billion in cash but this is what happens when people panic and the SEC does nothing.
agreed
there is some discussion that the cdswaps, a completely unregulated instrument/market, are actually fueling this problem far beyond its original scope. MS swaps are flying, and the market reacts to this, creating a self-fulfilling prophecy.
It's the same way where I work. I can speculate, and guess pretty good, and I can repeat what I've been told by senior management. But even though I am pretty well clued in, and have worked there (a much smaller, easier to understand company than Morgan Stanley) for many years, I don't know, and can't know, the real financial shape of my employer, outside of what is published in SEC filings and announced to investors, and a few tidbits in my corner of the company.
I do hope that Morgan Stanley does well, however. There are some (public) financial arrangements between Morgan Stanley and my current employer that are no big deal to Morgan Stanley, but that seem to be quite useful to my employer. I'd sure hate to see those arrangements fall apart.
Yes and no....
The future of brokerage houses of size is dim, and eventually they all will be small or connected to a bank and regulated like a bank.
As for this story, it is more of a strategic play to steer the shorts out of the market.
I work at a bank. I agree completely with you on this. Our casual non-official water cooler opinion is that WaMu is next, followed by Wachovia. I heard at lot of people at work mumbling about buying ammo and canned good. :-)