Morgan Stanley Started Down Bank Path Awhile Ago?

Am I the only one who was surprised more wasn't made of the following quote from a WSJ article today? It concerns the speedy transition of Morgan Stanley and Goldman Sachs to bank holding structures.

Morgan Stanley officials have been talking about this option internally for several months, and Fed officials have been stationed at the bank since the crisis intensified earlier this year. After last week's market crisis, Morgan Stanley officials asked the Fed to speed up its review and grant the bank designation sooner. "It became clear that the world had changed," said Morgan Stanley spokeswoman Jeanmarie McFadden.

If true, it implies that there were two giant stories out there for months waiting for journalists/analysts/investors to find. First, Morgan Stanley (and almost certainly Goldman Sachs) had long been investigating turning to a bank holding structure. I never that reported anywhere before last night.  Second, discussions with the Federal Reserve on the issue were sufficiently advanced such that Fed was doing a review and had people on site at Morgan since earlier this year.

Hello? Is this thing on? Does it strike no-one else as major news that we apparently had a giant taxpayer-backed put in place for Morgan and Goldman?

Comments

[peterrabbit:]

Yes, excellent spot. GS is of course putting the best spin on this, so it may be all garbage, exaggerated. What strikes me is how GS was boasting about their bet against the mortgage market last year, and the huge bonuses everyone was getting - but no one thought of putting sufficient capital aside to cover the increased macro risk collapsing housing prices obviously require. Utter bullshit.

2008 Sep 23 03:45 AM