Tomorrow morning Morgan Stanley will report its earnings for the third quarter. How will the bank do? Various analysts have predicted good things for the House of Gorman, having pored over the numbers available to them, and taking into account what other banks have said, guidance, macro economic factors and so on and so forth. Fox Business reporter Charlie Gasparino has also come up with a guesstimate, though his was arrived at in a slightly different fashion. Namely, talking to people, taking the pulse, and inquiring as to whether CEO James Gorman has been walking around the building like he’s got some pair of balls on him or not. Read more »
The House of Gorman has lost some good men to UBS. Read more »
Literally. Read more »
Charlie Gasparino: Gary Cohn’s Envy Of Morgan Stanley Might Suggest Changes Afoot, Actually Means NothingBy Bess Levin
Sayeth Chaz: Read more »
Feel free to exchange exultations, insults and sour-grape rationalizations below. Read more »
Umm so maybe someone wants to explain to me what happened to Glenn Hadden? He’s the head of rates at Morgan Stanley, formerly at Goldman, and he was just banned from all CME trading floors for ten days, which is a little funny because, like, what, was he going to walk around on an exchange floor? Like in a tour group? But actually he can’t use computers either,1 so basically, no Treasury futures for ten days. That starts in mid-July and, god, I’d like to be banned from a computer for ten days in July, but I guess the perks of being a successful rates trader include punishments like that.
Anyway the thing he did was … well here is the Notice of Disciplinary Action, which says that the thing he did was violate CBOT Rule 560, which requires that big “positions must be initiated and liquidated in an orderly manner.” So his offense was to trade in a disorderly way when he was at Goldman five years ago. Specifically:
December 19, 2008, during the final minute prior to expiration of the December 2008 10-Year Treasury futures contract, in order to cover the tail (a standard form of risk management activity associated with holding a Treasury futures position at expiry) for the position held by Goldman, Sachs & Co.’s Treasury Desk, Hadden, then a Treasury trader for Goldman Sachs & Co., executed a 100-lot market order, and then submitted a 50-lot limit order, which was only partially filled as a result of illiquidity in the market. During the course of these orders and subsequent fills, the market traded up 27+ ticks resulting in the final price of the December 2008 10-year Treasury futures contract settling above what was indicated by the December – March calendar spread.
So: he tried to buy a lot of Treasury futures real fast, and as a result of that he ended up paying too high a price for them. I guess that’s a little “disorderly” but also sort of underwhelming.2
What is going on? Obviously there are two possibilities: Read more »