Wachovia Stanley? Really?!

Why on earth did John Mack put out a memo Wednesday blaming short-sellers for the decline in Morgan Stanley's share price? It's the corporate equivalent of pinning a "kick me" sign to your own back -- and it looks like it might have helped drive him into the arms of Wachovia, of all possible merger partners.

Yes, Wachovia has a deposit base, but that's a bit like your would-be spouse having a pulse: a necessary precondition, but hardly reason to get married. If these two do end up in a shotgun wedding, I predict divorce within a couple of years. On the other hand, when the alternative is summary execution at the hands of a brutal market, it's amazing how attractive that altar in Charlotte can become.

Comments

[Mr.G:]

wachovia -is in the "shorts" sites as well right after washington mutual(according to rumors they arent showing their books either)(it is now obvious the mob on wall street only takes one victim at a time ) a merger between these 2 would be disastrous because the street is just starting to look their way .
The ceo at jp morgan can blame shorts all he wants but until banks and investment banks -"show what is on their books and go beyond current regulation(fannie/ freddie cooked their books legally so it is now assumed everybody else has ) no one is safe . The market is demanding if you are healthy prove it if you dont the market is going to short you plain and simple .It seems almost every bank out there has failed to give transparency as to what they are holding(overnight lending has ceased to exist because of this) and investors want to look at banks under a microscope right now - so what is the reality here; if a bank doesnt give 100% transparency it is basically going to be shorted to death whether there are mergers or not

2008 Sep 18 04:39 AM

[Mr.G:]

in addition to my previous staement I will ask a question -the banks know what I state above is true -why arent they giving investors all of the information they need so their stocks dont sink?

2008 Sep 18 05:02 AM

[tater:]

Mr. G, number one its Morgan Stanley, number two they openened there books the day before yesterday for the world to see showing ample liquidity. It appears to be a great private party where they move from on bank to the next to the next, it obviously doesnt matter what your books have on them. Your just the next short in line, Goldman, Morgan. People yell bail outs are bad, where the hell were the regulators on the way up???? A global deleveraging will have you waiting in line with a bucket full of worthless dollars to buy a loaf of bread. Your stocks sink hah, they will be worthless. The rules of the game have changed.

2008 Sep 18 05:13 AM

[williambanzai7:]

The hedge fund jackals are mauling the lions of the street and there is'nt much anyone can do to save them. Hedge funds are run by former traders who have little sympathy for their old masters.

2008 Sep 18 05:24 AM

[Mr.G:]

morgan stanley - sorry I had a mini stroke there - as for books being open I am talking about full transparency where investors see the line items not generalized numbers - investors need to see where those numbers are coming from -right now all investors know is lehman said it at one point it had adequate liquidity-fannie/fredd... said the same- aig (i am not a hundred % sure ) may have said the same at one point -earnings reports from those companies all showed they supposedly had adequate capital to continue under acctg rules -and then they went bankrupt/got federal loans / bought for pennies on the dollar whatever you want to call it -but they all went to the same place

2008 Sep 18 07:25 AM

[Chuck:]

Let's Call it Wachovia Morgan... then it can have the symbol WM.
OK, it may be in use Today, but Tomorrow it could be Available.

2008 Sep 18 08:36 AM

[Dave P:]

I guess MS has some banking operations, and WB has some securities operations, but it is difficult to see significant synergy, unless they are thinking that a combination will give them an opportunity to market to each other's customer base. Maybe the real savings are in taxes?

2008 Sep 18 09:30 AM

[hunter:]

mr.g you must not have heard wachocia CEO Bob Steel said his # 1 platform is total transparency. Why on this earth did Chris Cox SEC chairman eliminate the up tick rule July 07. This rule has been around since 1933 and would stop short sellers from driving good companies out of business. Short sellers can not do their dirty deeds if they are visible and can be tracked which what the up tick rule did. The SEC needs to reinstate this rule and even put a 90-120 day ban on all short selling. This will allow the dust to settle and not force good companies like the investment firms out of business.

2008 Sep 18 11:49 AM

[Grouper:]

The only reason they would merge is because they have so much counterparty exposure to each other. By merging they wipe it out. If they don't merge, one goes down and they both go down.

2008 Sep 18 02:02 PM