Silence on the Morgan Stanley front cannot be good.
For all our ribbing, Japanese financial institutions are not stupid. Walking into a transaction that begins with a de facto loss of rather significant proportions is unlikely in the extreme. And given the stakes of a Morgan Stanley failure (the market has such high hopes for a favorable rescue) Mitsubishi has Morgan and policy makers well and truly over a barrel. Knowing how critical a transaction (and the news of its completion) is, there is little or no motivation to remain silent if a deal is to be consummated on terms favorable to Morgan Stanley. The longer other firms have to wonder, the less likely counterparties are to trade with/extend credit to Morgan. That's not good.
A communications disruption can only mean one thing. Invasion. Nationalization. (Maybe).
Posted by guest , Oct 12, 2008 2:40PM
Invasion --- nice haha.
Posted by guest , Oct 12, 2008 2:43PM
too long, didn't read
Posted by guest , Oct 12, 2008 2:44PM
I'm pretty sure this deal is going through.
The hidden terms (maybe they will get a double-secret FED backstop, etc) of the deal might change, but we won't know about it :)
Posted by guest , Oct 12, 2008 2:46PM
Doesn't Andrew Ross Sorkin of the times always say that announcement must be made before the Asian markets open?
Posted by guest , Oct 12, 2008 2:47PM
@4- yes but every weekend there've been leaks before the official announcement. so far, nothing.
Posted by guest , Oct 12, 2008 2:48PM
Remember that loser with a law degree named John Carney, who used to write stories here.....Well that double-crossing SOB is rumor-mongering over at that "honest" Henry Blodget's 'Clusterstock' website.
Posted by guest , Oct 12, 2008 2:48PM
"concrete measures".....hah (via Bloomberg)
Posted by guest , Oct 12, 2008 2:58PM
@6- yes, it is unbelievably sad. I thought John Carney was better than that. I read some of his articles on Clusterstock and his writing is some of the most reprehensible rumor-mongering out there. Coming from DB, I thought he would have more sense....it seems that they want to bring companies down over there.
Posted by guest , Oct 12, 2008 3:01PM
Who knows what John Mack would pull out of his hat this time. Remember this Mitsubitshi deal came out of no where when everyone was talking about Wachovia buying out MS (that one sure looks silly right now). If I had to guess, maybe a dual capital injection by Mitsubitshi and CIC, with secret backstop by Fed. Why would CIC throw good money after bad? Look no further than what happened to Hong Kong during the 1997 currency crisis. China effectively opened its reserve up for the HK government, which allowed the HKMA to declare war on speculators. The Government ended up buying approximately HK$120 billion (US$15 billion) worth of shares in various companies, and became the largest shareholder of some of those companies (e.g. the government owned 10% of HSBC) at the end of August, when hostilities ended with the closing of the August Hang Seng Index futures contract. The Government started selling those shares in 2001, making a profit of about HK$30 billion (US$4 billion). The real question is: how would Washington feel about that? Or is Paulson smart enough to make the play with his TARP money?
Posted by guest , Oct 12, 2008 3:03PM
@6. Henry Blodget could never work on Wall Street, especially after his past deeds and history....and he has the nerve to start financial news outlets and blogs that spread lies and rumors...incredible! I mean, with his sketchy background and shady past! I wouldn't be too surprised if he got paid under the table to write some of those lies and rumor driven stories with John Carney. John Carney should've never worked here....now that we know his true character- complete scumbag.
Posted by HAM05 , Oct 12, 2008 3:03PM
EP - kind of makes me happy that someone else is working today. schadenfreudes, what a bitch she is.
Posted by guest , Oct 12, 2008 3:10PM
@6 - the rumor-mongering stories about Morgan Stanley needing a $60 billion capital injection?! don't help at all. Someone needs to let John Carney know that kind shit doesn't fly. Yeah, its sad that those carney is working with an morally bankrupt asshole like Henry Blodget, who has made more money doing fraud than in actual business. Clusterstock is complete worthless bullshit. Nice career move Carney...you dumbfuck!...I thought you had a law degree...your parents and your law school must be very proud.
Posted by guest , Oct 12, 2008 3:10PM
@6 - the rumor-mongering stories about Morgan Stanley needing a $60 billion capital injection?! don't help at all. Someone needs to let John Carney know that kind of shit doesn't fly. Yeah, its sad that those carney is working with an morally bankrupt asshole like Henry Blodget, who has made more money doing fraud than in actual business. Clusterstock is complete worthless bullshit. Nice career move Carney...you dumbfuck!...I thought you had a law degree...your parents and your law school must be very proud.
Posted by guest , Oct 12, 2008 3:11PM
@6 - the rumor-mongering stories about Morgan Stanley needing a $60 billion capital injection?! don't help at all. Someone needs to let John Carney know that kind of shit doesn't fly. Yeah, its sad that carney is working with an morally bankrupt asshole like Henry Blodget, who has made more money doing fraud than in actual business. Clusterstock is complete worthless bullshit. Nice career move Carney...you dumbfuck!...I thought you had a law degree...your parents and your law school must be very proud.
Posted by guest , Oct 12, 2008 3:14PM
During the last weekend of Lehman, is was a new rumour every 10 minutes. Leaks left and right, media pumping out stories like they were going out of style. That didn't end well. Maybe this time silence is a good thing.
Posted by guest , Oct 12, 2008 3:17PM
#12,13,14. If you are an attorney you are an officer of the court and you are bound to tell the truth.
Now, do many violate this? Sure, but if you are a member in good standing of the bar, they eventually catch up with them.
Posted by guest , Oct 12, 2008 3:23PM
Here's another rumor for the fire:
Lloyds deal with HBOS just collapsed.
http://www.reuters.com/article/ousiv/idUSTRE49B31520081012
HBOS is currently denying.
Posted by guest , Oct 12, 2008 3:29PM
because MS was doing the leh rumours that why. no there's nobody left
Posted by StupidEquityGuy , Oct 12, 2008 3:39PM
Interesting read from Alphaville...
http://ftalphaville.ft.com/blog/2008/10/12/16931/kemp-the-united-states-is-now-in-some-very-general-sense-bankrupt/?source=rss
Posted by guest , Oct 12, 2008 3:40PM
MS was not doing the LEH rumors?!....it was more Goldman traders than anything else. Why do you think Bear Sterns and LEH management repeatedly called Blankfien to get the GS traders to stop the bullshit.
Posted by guest , Oct 12, 2008 3:40PM
@18 MS was not doing the LEH rumors?!....it was more Goldman traders than anything else. Why do you think Bear Sterns and LEH management repeatedly called Blankfien to get the GS traders to stop the bullshit.
Posted by guest , Oct 12, 2008 3:42PM
HBOS and RBS are now owned by the United Kingdom
Posted by guest , Oct 12, 2008 3:47PM
@19. May be you should do away with the 'interesting reads' and start with some more 'accurate reads'
http://www.nytimes.com/2008/10/11/business/worldbusiness/11charts.html?ref=worldbusiness
Our financial problems are small relative to our GDP and debt...may be author needs to actually look at data and get some perspective before spewing crap.
Posted by guest , Oct 12, 2008 3:54PM
Relative until our GDP shrinks and our debt obligations balloon.
Posted by guest , Oct 12, 2008 4:21PM
Preposterous premise. What is there to announce? Deal proceeding according to agreed upon terms.
Posted by guest , Oct 12, 2008 4:24PM
EP - nice Phantom Menace reference
Posted by guest , Oct 12, 2008 4:38PM
bank holiday extended til wednesday, all banks, s&l and credit unions nationalized. Stockmarkets tank, dow at 4,000, then shuts for the end of the week.
we are all fucked
Posted by WindsorNot , Oct 12, 2008 4:39PM
This site really needs to stick to what it does best: being on top of the breaking news on the street. Incendiary speculation without any supporting evidence involving publicly traded companies is just the kind of thing that can get you arrested. EP, why don't you take a page from Bess's book and post entries that are based on some actual information.
Posted by guest , Oct 12, 2008 4:42PM
Huh -- I must be getting old in my late 20's. I thought it was a Simon & Garfunkel reference.
Posted by guest , Oct 12, 2008 4:53PM
SEG - the comments today seem to be coming from the same people commenting @ clusterstock to the crazy suggestion/rumor that MS may be in trouble. Oh yeah and MS being in trouble is the creation of Carney and Blodget.
Because a stock going down 40% in one day and losing over 50% in two days means that the company is strong and stable.
IMHO these are the same people who don't understand that the GDP of the USA is 70% consumption. That consumption number is also related to the fact that for the last 5 years the average person in the USA has spent about 115% of their salary on a yearly basis.
They are also clinging to the belief that MS has a strong balance sheet and is not in need of capital. Also that a Mitsubishi will still spend $9 billion to buy 20% of MS when in fact the current market cap of MS is around $11B.
They have not learned that most balance sheets these days are fiction (even if MS is not, they are tainted by the other 99% that have been proven fiction). They also don't want to hear that MS over night funding costs are 1500 points above Libor. Oh yeah and the firms clients (hedge funds and PB) are and have been departing en masse.
Just to explain to everyone that doesn't visit Dealbreaker very often. This is a site for people who already know and understand that this economy, country, financial institutions and other public companies are in a heap of trouble. We accept that the credit market is in shambles. We are on the edge of a Nuclear Winter.
This site is devoted to people who write (EP&Bess) on rumors, fact and everything else in the market place. And they do the best job in the blogesphere. The commentators are generally wonderful in the way they exchange information.
IMHO, poeple like SEG, anal_yst, C, 1-2, mrp, even spode all rock. This little community is better for having them here.
Carney may have made a mistake by leaving but he is NOT a liar, cheater, or a rumor monger.
ps - have now read in a couple of spots that Lloyds deal with HBOS is dead.
Posted by guest , Oct 12, 2008 4:54PM
I've been holding Mack all day as he comes to grip with the inevitable.
http://www.youtube.com/watch?v=FL6HK1YP9pQ
SPODE
Posted by guest , Oct 12, 2008 4:57PM
"Prostitution has not suffered drop-off despite economic meltdown
BY BARBARA ROSS and LARRY McSHANE
DAILY NEWS STAFF WRITERS
Sunday, October 12th 2008, 10:38 AM"
http://tinyurl.com/4plax9
Posted by beentheredonethat , Oct 12, 2008 4:57PM
@28
"Incendiary speculation without any supporting evidence involving publicly traded companies is just the kind of thing that can get you arrested."
The pressure is obviously getting to people, but what kind of horseshit is that? If that were true, the entire anyalst caste would be in Rikers, and no way you can name someone prosecuted, much less convicted, for saying anything they want about a company, absent outright fraud (company ooficers)
or market manipulators.
A month ago thinking MS would be in single digits would be "incendiary specualtion", too name just one.
Posted by guest , Oct 12, 2008 5:04PM
@ 28 - well perhaps we should skip EP and Bess and start at the top.
"The economy is strong" - GWB 3 weeks ago.
"WMD" - GWB/Cheney
"We will be greeted as liberators" - Rumsfeld
"Insurgency on their last legs" - Cheney
Oh yes and all those who spread rumors that it was the short sellers that were causing the market and financial instituions to go down.
Get a clue pal.
Posted by guest , Oct 12, 2008 5:09PM
@28
STFU. Yeah you and the Carney slammers STFU. If you want strictly "factual news", stick with your newswire.
@31
I agree. Where the hell did these idiots come from? Somebody quickly seal the hole in the wall between DB and Yahoo Finance
Posted by guest , Oct 12, 2008 5:09PM
Just more negative talk by liberals that hate America, and the troops.
Posted by guest , Oct 12, 2008 5:10PM
I mean @30, not @31
Posted by guest , Oct 12, 2008 5:12PM
Can somebody ban #28?
Posted by guest , Oct 12, 2008 5:19PM
My sources tell me that the original term sheet was for 10 billion yen, not dollars. Mistake in translation. How embarrassing.
Posted by guest , Oct 12, 2008 5:19PM
Can we ban people who post "Too long, didn't read". The joke just isn't funny anymore.
Posted by guest , Oct 12, 2008 5:28PM
Nothing new to report. They have been meeting their margin calls, so they don't need to find a partner ASAP like Lehman did. The transaction is expected to close on Tuesday. After that, the Treasury will likely inject additional capital and the firm will just ride out the rest of the storm.
Posted by beentheredonethat , Oct 12, 2008 5:31PM
@25 and others who believe what they read......
"Morgan Stanley ``urgently needs rescue'' by the US Treasury, which should buy preferred stock to help protect Mitsubishi UFJ Financial Group Inc.'s stake in the investment bank, George Soros wrote in the Financial Times."
This just published in Australia.
Posted by guest , Oct 12, 2008 5:31PM
37 here. I really did mean 31 and that's the truth, no rumor here.
Posted by Anal_yst , Oct 12, 2008 5:34PM
@ 30
Thanks, I do what I can.
The problem's we've been experiencing, while firmly routed in many, many bad decisions, have been entirely exasperated by the kind of panic, rumour mongering, and unbridled speculation from the likes of most of the MSM, as well as certain other outlets (blogs, etc). I don't think there is much of a concerted, organized effort, as we're already at thye point where very very few people will realize a net benefit from a (near) collapse of the global financial system.
The "who's next" (to go) mentality needs to stop. Yes, shit is bad, no argument to the contrary, at least from me, but panic has set in amongst many market participants (observers, etc). Much of this is driven by sheer and utter ignorance, as other commenters have pointed out. Unfortunately, its now the classic prisoner's dilemma:
Do you wait and hope that everyone else will chill the f' out and we'll see stability, or do you cynically (and perhaps correctly) bet on the stupidity and mob mentality of others, and pull your $ out before its too late, further contributing to the panic?
I don't have the answers, but fwiw, I'm 100% cash, and haven't pulled any $ out of any accounts (despite the normal hemmoraging from my checking account, that is).
I've seen a fair share of client's not only moving to treasuries, but withdrawing funds. What these people don't understand though, is that if their concern about a BofA or Citi going bankrupt come to fruition, they're gonna have far larger problems than having their assets frozen until the pieces can be sorted out.
Posted by guest , Oct 12, 2008 5:35PM
@40
Too funny, didn't laugh.
Posted by guest , Oct 12, 2008 5:36PM
Mitsubishi has a contract to provide the financing. People seem to negate the fact that if they walk away they could potentially face enourmous liabilities - even beyond the capital spelled out in the agreement.
I can't buy a stock and refuse to close becasue the price goes down - what makes anyone think Mitsubishi can?
There is no "adverse chanege" clause in the agreement.
Posted by guest , Oct 12, 2008 5:36PM
Mitsubishi has a contract to provide the financing. People seem to negate the fact that if they walk away they could potentially face enourmous liabilities - even beyond the capital spelled out in the agreement.
I can't buy a stock and refuse to close becasue the price goes down - what makes anyone think Mitsubishi can?
There is no "adverse chanege" clause in the agreement.
Posted by guest , Oct 12, 2008 5:37PM
@40
Too banned, didn't post.
Posted by beentheredonethat , Oct 12, 2008 5:43PM
@47
That last sentence cannot be correct. To go without that clause is suicide.
besides, adverse would normally read "material" and a cratering of the stock price is a "material change". What Soros seems to be saying in this mornings (Monday) FT is that even with the Mitsubishi stake, a run on the bank is continuing. If you were a hedge fund, why would you stay?
Posted by guest , Oct 12, 2008 5:52PM
I would stay to prove to all my peers that I have the biggest balls in the room. Right after I wrestle a polar bear to make the same point. After all, what's the worst that could happen?
Posted by guest , Oct 12, 2008 5:53PM
EP is defintely a guy, after that Star Wars Episode 1: The Phantom Menace reference.
Posted by guest , Oct 12, 2008 5:54PM
@49 No stock purchase agreement would include an out for the buyer based on a drop in the public stock price. If it did, the buyer would basically be gettting a free call option.
I haven't seen the contract, but it makes no sense for the buyer to have an out based on a stock drop.
If Mitsubishi doesn;t close, the could also potentially be liable for consequential damages to MS and even buyers of MS stock since the deal was announced.
It's a deal - they have announced it will close on Tuesday - if they reiterate it will just make people nervous.
Posted by Investorcluzo , Oct 12, 2008 5:54PM
okay people, it's officially out there:
http://www.nytimes.com/2008/10/13/business/13morgan.html?_r=1&hp&oref=slogin
futures are off significantly (again). ask yourself, who would complete a deal like this (would you)? clearly there was a "material adverse change". which, if you ask any lawyer, is going to be part of any merger agreement. if, as the rumor mongers would have you believe, the hedgies and other clients are pulling accounts (ms clearly wouldn't issue a press release on this as it would fuel the fire), mitsu would have a right to know and therefore renegotiate. discuss...
Posted by guest , Oct 12, 2008 5:56PM
@50 You live at the South Pole?
The Guy from Dellawhere.
Posted by guest , Oct 12, 2008 5:57PM
MS and MFUG back to the negotiating table. Going to be an interesting evening...
Posted by beentheredonethat , Oct 12, 2008 6:00PM
The material change need not be limited to a drop in the share price. It could easily be tied to capital ratios, outflows, etc......The point is anything can happen, and to assume it will close on the same terms as announced would not be prudent. As you can see, the market believes otherwise. As none of us knows the small print, do you really think they would put on a pair of handcuffs amidst this turmoil? And to compare this deal to you purchasing common stock is not really apropos.
As far as making people nervouse, really hard to see how that can be exacerbated at this point. Do you have any idea the number of joe-six packs have a very large cash stash at home right now?
Posted by guest , Oct 12, 2008 6:00PM
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Posted by guest , Oct 12, 2008 6:02PM
Funny to read #9's comments re: Hong Kong and the latest comments by Soros. What the HK government did in '97 effectively shut down short-sellers led by Soros's fund. Seriously, what is Paulson doing?
Posted by guest , Oct 12, 2008 6:03PM
It looks like Mitsubishi is looking for some kind of anti-dilution gaurantee from the US Treas. If it happens, we'll never hear about it.
My bet, they close but drop the conversion price to $25.
Both sides have nuclear winter threat on their side and staring them in the face.
US bails out MS if no deal - worst case is AIG deal 20% to current shareholders. MS biggest asset then becomes lawsuit against Mitsubishi for actual, collateral and maybe even punitive damages.
Posted by Investorcluzo , Oct 12, 2008 6:08PM
@beenthere - to further your point re:
"Do you have any idea the number of joe-six packs have a very large cash stash at home right now?"
I was out west this weekend with my brother and some of his friends - none of whom work in finance. the commentary at dinner was quite funny. I was immediately pinned as part of the evil empire who was getting bailed out by the government. then came the discussion about nationalizing healthcare. not once did any of them mention the fall in the value of their stock portfolios or 401(k)'s. why because they likely don't have large portfolios or watch their 401(k) closely. which is a long way of saying, j&j 6 pack are eating up what fox news and the rest of the talking heads are feeding them. it's the blind leading the blind which only fuels the fire - which is why mainstreet will continue to panic with every piece of new "news".
go cowboys!
Posted by guest , Oct 12, 2008 6:09PM
What site for futures prices?
Posted by guest , Oct 12, 2008 6:11PM
@51,
Between the fight club and star wars references, and the sharp, sardonic analysis, ep is a guy or the woman of my wildest dreams.
Either way, seriously ep, lets rove midtown doing 'human sacrifices.'
Posted by Investorcluzo , Oct 12, 2008 6:11PM
@61 - check out bloomberg news channel (30 on twc in nyc); futures now pointing north by 2.5%.
Posted by guest , Oct 12, 2008 6:12PM
@63 Thank you
Posted by beentheredonethat , Oct 12, 2008 6:15PM
@60
I'm not disagreeing with you. I'm not talking about folks with stock or bond holdings, except perhaps in a pension plan not controlled by them I'm talking about guys who are afraid their local bank is not going to open on any given day. The same guys who remember their grandfather's stories which are starting to sound not quite far-fetched.
All I'm saying is there are a bunch of people withdrawing their paychecks as soon as they hit.....
Posted by guest , Oct 12, 2008 6:20PM
I read that John Kemp piece of crap at Alphaville. He's an idiot - and I mean that. He's just massaging the numbers to throw out the incendiary idea that the US is bankrupt.
I agree that the US debt situation is ridiculous and untenable, but the idea that the US liabilities exceed assets is just nutty.
First of all, he admits that the net equity of US housing is $8.7 TRILLION, but that doesn't fit his thesis, so he tries to discount all the people who own their homes free and clear. Even the mortgaged properties have +$4 TRILLION of net equity at H1, which is a sizeable cushion even if housing prices fall further, but he tries to mark this down to $400B and then wants to haircut it to "prove" that mortgage holders are insolvent.
Look, in reality even people under water on their mortgages are still making their payments. Over time the net equity will increase as payments are applied and as housing prices stabilize and rise over the long term.
Second, all of the money that the US is spending on this bailout (he calls it $600B, but let's be real, it's more than a trillion) is going to be used to buy financial assets at depressed prices. Will some of those purchases be losses? Sure, but most of them are going to make the government a tidy profit. This isn't the same debt that's used to pay for contractors in Iraq or building bridges to Nowhere - it's using the Fed's very low cost of capital to buy financial assets.
Third, how does one really value the assets of the US? The US, collectively, is comprised of a huge amount of land (most owned by the Federal government), mineral rights, weapons systems, intellectual property, etc., etc., etc. Really the debt of the US should be measured against these assets because it would always be possible to sell an aircraft carrier, or, say Hawaii, to the Chinese in satisfaction of some debts.
And, as others have pointed out, the US GDP is much higher than the debt.
The US debt is certainly a problem down the line, but I see it coming to haunt us in the form of higher taxes, reductions in the payments promised under SS and Medicare, and therefore ultimately a lower standard of living for most Americans. Possibly balancing this out are improvements in technology and productivity (the real cost of food, for example, has gone down dramatically in the past few decades). It's possible that innovation will decrease the cost of healthcare, etc.
The idea that we would write down all debts by 20-25% is just nutty. It sounds to me like Kemp has a big mortgage that is under water and he wants some relief.
Posted by beentheredonethat , Oct 12, 2008 6:22PM
@60
Also, to whatever degree Main Street has panicked (not much), it pales in comparison to the panic of the professionals. You are not under the impression Main Street can swing the Dow a 1,000 points intra-day I trust.
Main Street has been well behaved throughout this, it is the moneychangers who once again have fled the temple. (FDR 1933 Inaugural speech)
Posted by guest , Oct 12, 2008 6:28PM
@63 good call. Who knows what will happen by the AM, but 3 pieces of decent data: the Tel Aviv stock market is "only" down 3-4% (after being down 8% early) and they are playing catch up after a 4 day weekend; the Euro is rallying in Sydney; and futures up on the CME.
The real questions for tomorrow are: a) do this weekend's announcements bring Libor back in line?, b) will the MS deal be completed on substantially similar terms, and c) does Paulson inject capital into the banks before the US open?
Posted by Investorcluzo , Oct 12, 2008 6:28PM
here we go again...santandar is now in talks to buy the rest of sovereign if the government is willing to allow a foreigner to acquire a u.s. bank (doubtful that they would block it). I'm not sure how the shareholders will feel about an at-market deal (given the agreement originally stated $40 a share). I guess they could issue stock and tell investors they share in the upside of a successful deal.
http://online.wsj.com/article/SB122384934767726943.html?mod=testMod
these deals are starting to make shorting financials like walking through a mine field. perhaps cox was doing people a favor.
@beenthere - I was only agreeing with your point that mainstreet is like a deer caught in the headlights. they aren't driving market swings, they are getting caught up in them.
Posted by beentheredonethat , Oct 12, 2008 6:31PM
Okay, boys, here's the fine print in the MS-Mitsubishi deal. Get Sullivan and Cromwell on the line.....
"However, Morgan only makes a bare number of representations and warranties in the agreement. The most important of these for providing a possible out to Mitsubishi is that Morgan represents that:
No Material Adverse Effect. Since August 31, 2008 and except as described in the SEC Reports, no event or circumstance has occurred that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect."
A decent lawyer could drive a truck through the holes in the language. If Mitsubishi wants an out, its got one, and MS would be years dead before it ever saw a court of law.
Posted by guest , Oct 12, 2008 6:34PM
Markets are rocketing higher right now.
This was the bottom!
Everything from here out is good!
buybuybuybuybuy or "zomg" you will miss the rallay!
Posted by guest , Oct 12, 2008 6:36PM
@70 That is BS. Not a MAC clause.
MAC clauses are very strictly contrused against buyers - the one you suggest would be worthless
Posted by guest , Oct 12, 2008 6:37PM
Not for anything, but, if people keep taking cash and putting it under their mattresses, then they are simply taking the money out of circulation and thus contributing to this problem with liquidity.
If mom and pop on main street are selling their stocks and bonds and going to cash at the same time that some hedge funds and other HAVE to sell cause they have no choice then mom and pop are contributing to the market down turn in a big way.
Someone, somewhere has to step up and talk to mom and pop. Jaime Dimon I think it should be you.
Posted by guest , Oct 12, 2008 6:38PM
@30. I'm sorry you feel people are ganging up on you and your band of doom-and-gloom retards. But, the truth of the matter is that the huge stock declines in MS are not caused by any fundamental changes in their business. Analyst after analyst has said Morgan Stanley has a relatively solid balance sheet and future prospects. The only thing that can lead to such a drop is irrational fear and loss of confidence. That is EXACTLY where people like Carney, Blodget and Rubini come in with there dire predictions and pure speculation. Their stories amount to rumor-mongering and devoid or any journalistic integrity. Seriously, please don't try to defend the dirty rag that is Henry Blodget.
Posted by guest , Oct 12, 2008 6:43PM
BTW - WSJ's front page says the MS deal is being renegotiated now and the general terms are in effect with likely changes to the conversion price on the preferreds and maybe the preferred/common ratio.
Apparently the Treasury will not make an investment alongside (big mistake in my opinion - this would be a good time to inject another $5-10B for shock-and-awe), but they are structuring any future investment so it will not wipe out MUFG's current investment.
Posted by guest , Oct 12, 2008 6:47PM
No premium is rough. Playing around in penny bank stock just isn't a good idea, no matter what side of it you are on or how big you think you are. You're dealing with government risk. There are better and broader things to speculate in without risking getting squeezed on the stock doubling, deleted like WaMu, or something else.
I'm structuring some capital-raising trades of stuff I vultured on Friday and some more vulture trades, all on stock that is viable and oversold.
We either had capitulation on Firday or will have it on Monday.
This isn't going to be a bull market for a looong time, we have a "U" at best and a "L" at worst, but we're close enough to a fundamental short term bottom that I'm comfortable putting some of my cash to work. Not all of it and I'm not planning on staying in for that long at all.
Posted by beentheredonethat , Oct 12, 2008 6:47PM
@72
Complain to the NY Times. They are saying that is the EXACT LANGUAGE contained in the agreement. It's posted there now....
Posted by guest , Oct 12, 2008 6:51PM
the solution to the problem is simple -- bring back RVD, the whole f'n show
Posted by beentheredonethat , Oct 12, 2008 6:51PM
From NY Times:
"The investor agreement defines a “Material Adverse Effect” to mean:
any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects or occurrences, has a material adverse effect on (i) the business, assets, liabilities, results of operation or financial condition of the Company and its subsidiaries taken as a whole or (ii) the ability of the Company to consummate the transactions contemplated by this Agreement, other than, in each case, any adverse effect resulting from the announcement of the transactions contemplated by this Agreement."
Apparently someone leaked the agreement to the Times, because they are quoting it at will.............
Posted by guest , Oct 12, 2008 6:53PM
74, you're equating Roubini to Blodget?
Like Roubini or not, he's been dead right, and that gives him cred.
Posted by guest , Oct 12, 2008 6:55PM
cluzo, home Texas or SoCal?
SPODE
Posted by guest , Oct 12, 2008 6:57PM
RVD 4:20 I just smoked your ass!!!
Posted by beentheredonethat , Oct 12, 2008 6:58PM
@73
Love the idea of castigating Main Street and feeling sorry for the hedge funds, those bastions of hot money, who have to sell. If Ma and Pa have a kid in college and the tuition needs to be paid, they need the cash as well. Besides, the amount of selling from Main Street doesn't even register when looked at alongside the amount sold by the funds, that oh-so-professional class. Please.
Posted by Investorcluzo , Oct 12, 2008 6:59PM
@spode: vegas for the tx-ou game...longhorn football is back on top. hey, my schools didn't have (good) football teams - need to root for someone.
Posted by guest , Oct 12, 2008 6:59PM
To those of you who wonder why people depise Blodget so much. Here is a little info. How can you seriously call this guy a financial journalist or expect him to have any integrity?!
"- In early 2000, days before the dot-com bubble burst, Blodget personally invested $700,000 in tech stocks, only to lose most of it in the years that followed.
- In 2002, then New York State Attorney General Eliot Spitzer, published Merrill Lynch e-mails in which Blodget allegedly gave assessments about stocks, which conflicted with what was publicly published.
- In 2003, he was charged with civil securities fraud by the U.S. Securities and Exchange Commission. He settled without admitting or denying the allegations and was subsequently banned from the securities industry for life. He paid a $2 million fine and $2 million disgorgement but kept millions more he earned in fees while promoting investments in stocks which failed.
- Blodget's later articles for the magazine have focused on the return-limiting actions of individual investors, including listening to analysts and the financial media...the very thing he's trying to accomplish"
Posted by guest , Oct 12, 2008 7:12PM
@85 --- Hey asshat. The only person here commenting about hating Blodget is you. Everyone knows who Henry Blodget is, and no one gives a shit about him.
And apparently Lat keeps on commeting on here probably under disguise, as long as you keep Bess, this place will continue to attract traffic (much love to EP too but I only primarily stop here on a weekday to read whatever crazy stuff she posts).
Posted by beentheredonethat , Oct 12, 2008 7:13PM
Blodgett is so very last decade. Who gives a fuck.
Posted by guest , Oct 12, 2008 7:15PM
The entire purchase agreement is available here.
http://www.sec.gov/Archives/edgar/data/895421/000089882208000945/exhibit101.htm
Posted by beentheredonethat , Oct 12, 2008 7:15PM
Mitsubishi will get its price reset. MS can't afford a breakdown in negotiations. All the Japanese have to do is wait then out until the early morning, and MS will be forced to capitulate to whatever is on the table then, as the markets will be opening. If it's not enough to suit them,, they will then call Paulson. NO ONE has an ounce of leverage over Mitsubishi in these negotiations. Paulson will tell MS to take whatever they can get, shut the fuck up, and call him back on his private line.
Posted by guest , Oct 12, 2008 7:17PM
@79 Not much value to Mitsubishi if this is the MAC clause - again these things are alwasy construed heavily against the buyer if there are no specifics in the MAC clause.
Also, MS could claim at this point that Mitsubishi re-negotitaion was the cause of of adverse change.
I don;t pretend to know what will happen. I can say that Mitsubishi must be negotiating with an understanding that there could be tens of billions of downside if they don't go through with the deal.
In these situations, the deal virtually always gets done with some face-saving tidbits thrown in at the last minute. It's a nuclear winter situation where both sides have too much to lose.
Posted by beentheredonethat , Oct 12, 2008 7:23PM
@90
The fact that MS is re-negotiating pretty much concedes the MAC point. No material adverse change, why the renegotiation? If MS believed that, they would have demanded to consumate the deal as agreed. Clearly they blinked. Clearly they are desperate. Clearly they have at most 12 hours to solve this. Clearly MUFG will be doing Soduko puzzles for the next 11 1/2 hours, will then look up and ask MS, Ready Yet? 10 bucks. 12 if you throw in HQ.
Posted by guest , Oct 12, 2008 7:32PM
Remember shrewd investing is about looking at the long term market conditions.
Hence, my money is going into JPM, GS, the military industries, Blackwater, riot gear, stun guns, internment camps, prison labor management science, and anyone on the cutting edge of enhanced interrogation techniques.
Sure thing! http://tinyurl.com/4ofhre
Posted by guest , Oct 12, 2008 8:11PM
Remember a few short weeks ago Carney posted that LEH PR people were "fair and honest"...
Nothing else need be said.
MS
Posted by guest , Oct 12, 2008 10:21PM
Carney + Blodget = really bad joke for a life.
Sorry to see Carney end up on life's lower rungs....and he has a law degree...
Wow, it really takes a lying, immoral rumor-mongering loser to blow it that big. But, then again Henry Blodget did blow it that big last decade...what a corrupt lying scumbag...people like that should do what they're good at...being hitmen, trading drugs, working for the FARC in Columbia...etc..
Posted by guest , Oct 12, 2008 10:56PM
@66:
Where do you get your numbers? US GDP last year was $13 trillion, and there's been very little growth this year. Meanwhile, the national debt ticked over $10 trillion last week, and will probably add another trillion by the time the bailout is done.
11/13 is 85%. That's not significantly higher, IMHO. You should try looking north; Canada's debt to GDP ratio is 33%, our banks are solvent, and we are expected to have the highest growth in the G8 next year (OECD report). A lot of stocks on the TSE are cross-listed in New York, so they're getting banged pretty well, but I expect the rebound in Toronto to be faster and higher than the Dow.
Posted by guest , Oct 13, 2008 5:20AM
@92, as much as I agree with your long-term analysis on your blog, still, fuck you. You want to make bank on peoples' suffering?
Posted by guest , Oct 13, 2008 8:02AM
"@92, as much as I agree with your long-term analysis on your blog, still, fuck you. You want to make bank on peoples' suffering?"
You should understand the concept of sarcasm before you start commenting on line. It will make you look less stupid.
http://yourmortgageoryourlife.com