Did Morgan Stanley's CEO Just Utter His Famous Last Words?

james gorman

Photo: (AP Photo/Richard Drew)

Back in February, Moody’s warned that Morgan Stanley could face a massive three-notch downgrade.  According to its own estimates, Morgan Stanley would have to put up additional collateral and make termination payments totaling up to $7.2 billion.Speaking at the U.S. Financials Conference in New York yesterday, CEO James Gorman was quoted saying that a three-notch downgrade would be “a somewhat stunning outcome.”

Will these prove to be the famous last words of James Gorman?

For Morgan Stanley’s sake, let’s hope that they don’t face a three-notch downgrade.  But for everyone’s sake, let’s hope that they’re fully prepared and that they would not actually “stunned” should such a downgrade come.

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