Morgan Stanley.... the next bank to fall?

Morgan Stanley


Does anyone know anything about this? Apparently Morgan Stanley are facing difficulties…


Yeah, probably. They aren’t even accepting graduates this year. I think their financial situation is dire.


I am actually thinking of applying for Barclays Capital and JP Morgan. Do you think is worth applying at this time?


Apply to Barclays, they are doing quite well with the Lehman Brothers aquisiton and all but I don’t think JP Morgan are recruiting.


It’s already in talks for a takeover deal with Wachovia, so I’m guessing that Morgan sees itself as healthy enough. The share price tumble could just be from the rising cost to insure against default of their debt. Since the FT have reported that their third quarter earnings were above expectations, I think the likelihood of insolvency is quite low. But then again, anything can happen in the next week.


Just on another point, with regards to the Lloyds-HBOS merger: is the waivering of competition laws justified in any economic climate? God forbid the juggernauts that come out of this crisis fail at some future date…


In terms of the competition situation, it’s not great. You don’t really want less players in a market where there isn’t that much choice anyway, especially when you create such a large bank as a result. That said, having 1 bank survive is still better than having 2 banks collapse so I suspect that’s what the governing bodies must have reasoned was the best of a bad situation.


The FSA and Bank of England are saying that the merger is in the interest of financial stability. But, with the Special Liquidity Scheme being offered by the Bank of England, surely HBOS had time to instill confidence back in the market? My point is, was it really that justified? Could short sellers target Lloyds next for taking on a company far bigger than it is? It would be a disaster if that happened.


I suppose the government, HBOS and Loyds TSB think it unlikely, or this wouldn’t have been pushed ahead. However, as we keep hearing, no one is untouchable now. There is massive lack of confidence everywhere and MS, GS and even the merged HBOS-LTSB could still be targeted by short sellers.

I’ve heard that HBOS actually approached Lloyds TSB about this a month or so ago - which makes things rather more strange. Despite HBOS’s proclamations that they had nothing to worry about, and everyone publicly blaming short sellers, it may actually be that HBOS are/were worried about something on the horizon.


I believe Morgan are O.K financially, but are suffering greatly in investor confidence, and are falling victim to aggressive short selling of their equity, which John Mack has expressed extreme annoyance at and has requested that the Fed step in to prevent the shorting of their stock.


That’s very interesting. Of course, nobody can really predict market sentiment in the future, and - correct me otherwise - I suspect HBOS may have seen something internally for them to have approached Lloyds. In fact, there has been some talk about their commercial property loans posing some trouble for Lloyds. It’s a huge risk Lloyds have taken on, particularly since there’s no big government guarantee this time around.


Wachovia will acquire Morgen Stanley next week, according to a partner who interviewed me today…

Maybe an insider…lol


A partner at which firm?