John Mack said last night at panel discussion hosted by Bloomberg News and Vanity Fair that as an (outgoing) chief executive of a major bank, he welcomes, nay, begs for increased regulation by the Fed. He illustrated this need with a little story about how during the credit boom, he almost did a deal at 8 times leverage, and then someone else came in and did it at 10. And you know what that showed Mack? That “We cannot control ourselves. You have to step in and control the Street.” So there it is, the bottom line. We will not stop until you pry the crack pipe from our dead lifeless fingers. If you thought that time we got picked up by the cops for freebasing smack off a homeless man’s dick in a back alley was a wake-up call, you thought wrong.
John Mack
Is Wall Street Comprised Of A Bunch Of Crackwhores Who Can’t Help Themselves, Crying Out For Help? John Mack Says Yes
By Bess LevinNo projected numbers yet but John Mack told employees today that re: compensation, “it’s going to be controversial. And it is what it is.” Which should bode well for the Mackettes! If it’s going to piss off the public, that’s gotta mean it’ll be good for you.
If John Mack Had Gotten His Way, He And Blankfein Would’ve Told Jimmy Chanos And His Friends Where They Could Go On National TV
By Bess Levin
Most of you will probably agree that when you want to get a serious message out the (financial services) masses, the best medium through which to send it is a place where your news is served with a dash of Kneale and a pinch of MMC’s tits. That’s why on September 17 of last year, John Mack called up Lloyd Blankfein and asked him to appear, hand in hand, on CNBC. The two men (believed) they were under attack by the shorts, and needed to go on the offensive. Unfortunately, such a broadcast never came to pass, due to the indirect influence of a certain Italian-American investigative journalist (more on that later), and they had to settle for a letter to the paradoxically named Chris Cox. But let’s backtrack for a sec, and examine the mental state the Knife was in when he came up with the idea to give it to the shorts live. Obviously he was under a lot of stress during those fateful days in September, and while he probably wasn’t ready to laugh at it at the time, will likely now join us as we review some of the sound bites that came out of his and his lieutenants mouth re: getting the Dick Fuld end of the stick.
Where is that little shit, David Einhorn, huh? When I find that pipqueak I’m gonna rip his urethra out through his throat. They can’t do this to us!
While Mack was beginning to believe that the hedge funds were conspiring against the firm–”This is what they did to Dick [Fuld, of Lehman Brothers]!” he roared, referring to the Monday implosion of Lehman–there was fresh evidence that some of them actually did need the cash. Funds that had accounts at Lehman’s London office couldn’t get at them and came begging to Morgan Stanley and Goldman.
Can’t we make citizen’s arrest or something?!?
“It’s outrageous what’s going on here,” Mack almost shouted, arguing that the raid on Morgan Stanley’s stock was “immoral if not illegal.”
To: All Employees
From: John Mack
That was really fucking close, people.I am pleased to let you know that we have officially closed today on our $9 billion equity investment from Mitsubishi UFJ Financial Group (MUFG) – a day earlier than expected. This investment further strengthens our capital position and gives us a powerful strategic partner going forward.
[Walid: Is this a disclosure issue if I fail to talk about how we almost blew it trying to bluff our way out of those damned preferred shares? Also, please find out what kind of flowers Nobuo Kuroyanagi likes and send him two dozen.]
Under the terms we were forced to accept of the deal, MUFG is investing $9 billion in exchange for a 21 percent interest in Morgan Stanley, as agreed in September. MUFG is acquiring $7.8 billion of perpetual non-cumulative convertible preferred stock with a 10 percent dividend and a conversion price of $25.25 per share, as well as $1.2 billion of perpetual non-cumulative non-convertible preferred stock with a 10 percent dividend. This investment is a win-win for both companies, and we are honored to welcome MUFG as a long-term investor and strategic partner.
[Walid: I'm ok calling this a "win" for us, right? I mean, I'm allowed to compare against this week, not three weeks ago, right? Also, remind Dave that we have to replace all company cars with Endeavors.]
MUFG and Morgan Stanley are working toward numerous areas of collaboration, including pursuing a lending relationship, and we are confident that the combination of these two world-class institutions creates a powerful global alliance in the current challenging market environment. Indeed, this strategic partnership will bring together Morgan Stanley’s global investment banking and asset management expertise with MUFG’s vast resources and significant expertise in beer truck and bus manufacture steel plastics oil insurance aluminum retail banking to better serve clients worldwide.
[Walid: Are we sure about this synergy thing?]
I, for one, welcome our new Tokyo overlords. I know many of you can’t stand the thought of dealing with more low-brow retail banking and the This alliance also is a key step in Morgan Stanley’s downgrade transition under our new bank holding company status. MUFG is the world’s second largest commercial bank with $1.1 trillion in assets, and their support and insights will boost our efforts to grow our deposit base and expand our retail business – leveraging the many advantages Morgan Stanley currently has. As you know, we already have two deposit taking institutions with total deposits of $36 billion – and the Firm will be looking to grow those deposits over time. We also have 8,500 financial advisors and almost 500 branches, which the Firm can use to expand the retail banking products and services we offer our clients. We will actually have enough cash to make payroll and We also will be looking at acquisitions that might make sense for the Firm and help us ramp up our deposit base.
Today’s investment further bolsters Morgan Stanley’s strong capital position – and boosts our Tier 1 Capital Ratio to more than 15.5 percent, on a pro-forma basis as of August 31. This is more than double the 6 percent required by the Federal Reserve to be treated as well-capitalized and is one of the highest Tier 1 Capital Ratios among bank holding company peers. This investment also will reduce Morgan Stanley’s leverage ratio to under 20x and its adjusted leverage ratio to just over 10x, on a pro-forma basis at August 31. The fact is that our capital and liquidity positions remain strong, as we made clear in our 10Q filing on Thursday and as numerous financial analysts made clear in their reports last week.
[Walid: "Made clear," is ok here, right? Even if no one at all ever bought it?]
These are truly fucked up unprecedented times, and I know the last few weeks have been difficult for all of you. Tough times like this test people, and the people of Morgan Stanley have risen to the challenge. You have continued to serve our clients and build our business, and I am incredibly proud of how the Firm has responded to these challenging markets. MUFG’s investment is a powerful endorsement of the tremendous value in the Morgan Stanley franchise, but the fact that so few of you could find jobs elsewhere in time to caliber and commitment of our people give me even greater confidence about the future of this Firm. Thank you all for your continued hard work, focus and dedication.
Morgan Stanley Memo: ‘We Also Will Be Looking at Acquisitions’ [The Wall Street Journal - Deal Journal]
We have the best readers in all of finance. Yes, they have names like “MostOffensive,” but they catch big ones for us now and then.
The reality is that the media can do far more damage far more quickly than short sellers ever will. Shall we call for them to face criminal charges for their poor judgment as well?
Editor’s Note
A front-page article on Thursday reported on discussions the investment bank Morgan Stanley has had with possible merger partners. It cited two people who were said to have been briefed on a conversation in which John J. Mack, chief executive of Morgan Stanley, had told Vikram S. Pandit, Citigroup’s chief executive, that “we need a merger partner or we’re not going to make it.”
After the article appeared, Morgan Stanley vigorously denied that Mr. Mack had made the comment, as did Citigroup, which had declined to comment on Wednesday. The two people whom The Times cited now say that because they were not present during the discussions, they cannot confirm that Mr. Mack in fact made the statement. The Times should have asked Morgan Stanley for comment and should not have used the quotation without verifying that the two people had direct knowledge of any comments made by Mr. Mack.
Corrections [New York Times] (Via DealBreaker reader “MostOffensive”)
Whatever happened with those ads Morgan Stanley shot in December, the ones with the male Vietnamese models? They were *supposed* to run in the Journal and online but the interns have been looking for them daily and so far, nothing.
So Bearpont Morgan Chase CEO Jamie Dimon was on Charlie Rose last night talking about the purple pot smoking elephant in the room and even though it would’ve been a lot cooler if Dimon had gone on Inside The Actor’s Studio instead, it was still a pretty interesting interview. They talked about the $2, staying up all night, the Fed and so on and so forth. Of note to some was the fact that Dimon said that those responsible for BSC’s fall should go to prison “for a long time,” but that wasn’t the most shocking aspect of the sit-down.
Toward the end of the interview, when things were getting loose, and Rose was comfortable enough to start asking unprofessional questions (ex. “Have you ever taken steroids?” “Have you ever killed a person?”), the conversation turned to looks. Seemingly out of the blue, the interviewer asked the interviewee, “Forgetting out balance sheets, and exposure, and all that shit, who is the hottest piece of man meat on Wall Street?” After registering some initial shock at the question, Dimon answered “Blankfein,” with a confidence that suggested he’d thought about this before. There’s no accounting for taste and beauty is subjective, so one would’ve assumed that Rose would accept the answer and move on to a follow-up question (“Have you ever thought about taking things with LB to the next level?”) but oddly, he bellowed “No! Wrong answer. Try again.”
Confused but game, Dimon offered “Pandit?” Apparently this was wrong again. For the next ten minutes, Rose proceeded to shoot down every name offered by JD until, in an apoplectic fit, Rose screamed “Mack, god damn it, the answer is Mack! Not Blankfein, MACK. Not Pandit, MACK. Not Fuld, MACK. No one really knew what to make of the thing, and it sort of seemed best to just act like everything was normal so nobody got hurt. Today, though, we’ve uncovered the reason behind Rose’s bizarre and Rain Man-esque partiality toward the Lebanese Lothario. And, not to start a baseless rumor, a possible collusion between The Charlie Rose Show and Morgan Stanley that, when the smoke clears, we’ll be able to point out as the reason for the (impending) implosion of JPMorgan.
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