Is it just us, or do you also remember reading a headline a few weeks ago saying that Morgan Stanley was saved by a Mitsubishi investment? (Update: It was such a bad investment that Mitsubishi now needs a bailout). And then, a few days later, reading another headline saying Morgan Stanley was saved again by another $10 billion from the taxpayers?
So why on earth is Morgan Stanley stock trading as if the company is going out of business again? It was down to $13 yesterday!
As Mr. Incredible might ask, why can’t Morgan Stanley just stay saved? Now that GM, Chrysler, the insurance industry, and Lord knows who else are lining up at Hank Paulson’s door with hats in hand, we really don’t have time to worry about Morgan Stanley anymore.
If Nouriel Roubini is right and Morgan Stanley is going to zero, we wish it would just go ahead and go there. Hank Paulson won’t let it declare bankruptcy, of course, given the global consensus about how he blew the Lehman decision. So if taxpayers are now going to have to pump in tens of billions of additional capital, why don’t we just stop telling each other happy stories and do it now? That way we can finally write all of Morgan Stanley’s “assets” down to fair value and be done with it.