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Rap Sheet

Author:

Reggie Abaca

Subject:

Analysis

Date:

10/11/08 at 6:21 PM CDT

 

 

READ: 282

RPLY: 3

0

0

RECS:1

Sentiment:

Strong Sell

Lynch Mob Takes On Morgan Stanley

The question is what will the Feds do?  Will they support Morgan Stanley the company?  Or will they support MS shareholders.  Apparently, the United States government thinks there is no distinction there.  But that is not reality.

If anything has been learned from Bear Stearns, Lehman, Merrill Lynch, Washington Mutual, IndyMac, AIG, Fannie Mae and Freddie Mac, it's that stock prices are inextricably bound to a company's credit rating.  Especially in the case of banks, there is nothing worse than a sudden crisis of confidence.

And here is the problem: short sellers profit off of a crisis in confidence.  Today, the only 'investors' that are making any money are short sellers.  And hedge funds fighting to survive in this market are fishing for weakness.  The latest catch of the day is Morgan Stanley.  Their independent existence may already be a foregone conclusion.  The question is who's next and what will happen to the market.  And more importantly, when will federal regulators finally understand the root of the problem.

There's a small glimmer of hope however: U.S. stock exchanges - private companies which are losing credibility with all of this - are themselves considering ways of limiting short-selling in an effort to root out market manipulation.  The recommendation with the most traction calls for a five-day ban on short-selling in any stock that finishes a session down at least 20 percent from the previous day's closing price, according to The Washington Post.

I hope Morgan Stanley makes it.  If they don't it could be more difficult days for the world economy.

It just amazes me that the regulators are still not reigning in on naked short selling, even with a crashing market.


Agr :0

Dis :0

RECS:0

None

Author:

Perry Rod

Subject:

Analysis

Sentiment:

Neutral

Date:

10/12/08 at 12:57 AM CDT


Agr :1

Dis :0

RECS:0

Author:

Mahyar Hashemi

Subject:

Analysis

Sentiment:

Strong Sell

Date:

10/13/08 at 11:39 AM CDT


Agr :0

Dis :0

RECS:0

None

Author:

Perry Rod

Subject:

Analysis

Sentiment:

Neutral

Date:

10/13/08 at 2:40 PM CDT

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