Rumors of the imminent demise of Morgan Stanley have been flying around over the past week. Readers of CFP know that I have been discussing this possibility since I started the blog:
February 27, 2012
Morgan Stanley Is The Rosetta Brick
February 28, 2012
Morgan Stanley Is The Rosetta Brick - Part 2
My concerns were based solely on the disaster that is the MS stock chart.
Two days ago Beacon Equity Research published an alarming article titled "Get Your Money Out Of Morgan Stanley - Fast!". And this morning I listened to a podcast where the always awesome Jim Willie predicted that MS would not survive longer than fourth months from now.
Then you have Business Insider reporting that close to 50 top managers are planning to leave Morgan Stanley, supposedly due to technology problems. The investment bank that just completed the biggest tech IPO of the decade, namely Faceberg, is having technology problems? Yeah, sure they are...
It looks like the writing is on the wall for this one. The story about the managers planning to bail tells me that the rumors are more than trash talk. The top insiders know that their ship is taking on water, and they are preparing the lifeboats right now. Welcome to Lehman 2.0.