Morgan Stanley’s chief executive has been one of the leading critics of short-sellers during our financial crisis. John Mack even went so far as to call for investigations into firms that shorted his investment bank.
But if Mack really thinks short sellers are causing mischief, he might want to communicate this to his employees. Julie Satow is reporting that Morgan Stanley was contacting its private wealth clients who owned shares in Ford this week to see if the shares could be borrowed to execute short sales.
Morgan Stanley was so desperate to borrow the stocks that it offered to pay one client 13% of the dollar value of the stock borrower, an enormous fee. This seems to indicate that there must be lots of short interest in the stock, eating up the inventory of borrowed stocks.
More importantly, it does seem that Mack might need to explain again why its OK to short a troubled car company but not his bank.
Click here to see the email that Huff Po obtained spelling all this out.