Morgan Stanley Not Participating In The Rally

Update: FT Alphaville noticed the same thing as us and presents an interesting theory. The idea is that Morgan Stanley (MS) has the least amount of writedowns yet to take this year, and thus the M-to-M reforms benefit them the least. That’s at least an optimistic interpretation of what looks, on surface, like only bad news.

Original post: Anyone know what’s up with Morgan Stanley (MS) today?

Financials are generally up strong — along with the rest of the market, but Morgan Stanley is sticking out like a sore thumb, down by about 2% at last check.

We’re a little sceptical that this M-to-M stuff has much to do with the rally, since everyone knew today’s rule change was coming, but obviously it’s having no positive affect on MS.

The only recent news is that John Mack told the troops that the bank was not in position to pay back TARP anytime soon. Other than that, we’re at a loss

Theories? Ideas?

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