Much of the financial world appears to have recently been convinced Morgan Stanley will be unable to survive the European sovereign debt crisis because of its relatively small size, dependence on skittish short-term credit markets and exposure to troubled French banks according to Foxbusiness sources.
As evidence of this, Morgan Stanley’s stock price has plunged to 2008 levels, the cost to insure its debt has even exceeded that of French banks and the rumor mill is churning out a stream of doomsday chatter.
However, because of drastic changes to its balance sheet, lessons learned during the last Wall Street crisis and distance from today’s toxic assets, most analysts believe Morgan Stanley is no Lehman Brothers.
Morgan “is under broad-based attack,” said Dick Bove, a banking analyst at Rochdale Securities. “If they’re correct, the company will be bankrupt. If they’re wrong, and I don’t see how they can be right, the stock will turn out to be a pretty attractive investment.”
But meanwhile the stock is tumbling. Maybe traders kow something Bove doesn’t or doesn’t want to say.
Read more: http://www.foxbusiness.com/industries/2011/10/06/will-europe-transform-morgan-stanley-into-lehman/#ixzz1a74eEZIh
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