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Morgan Stanley (MS) +3.4% premarket after it avoids the dreaded 3-notch downgrade from Moody's...

Friday, June 22, 2012, 7:10 AM ET
Morgan Stanley (MS) +3.4% premarket after it avoids the dreaded 3-notch downgrade from Moody's last night. Just the 2-notch downgrade it received means the bank will face about $3B less (than a 3-notch) in collateral calls from trading partners. From the last 10-Q: "CEO James Gorman has met with the ratings firm more often than usual in the past quarter."

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This news story has 4 comments:

CaladesiKid2 Comments (185)

What a distorted view of the financial world! So, a TWO notch downgrade is celebrated? Why not celebrate that MS did not receive a five notch downgrade? Rational thought suggests we should be concerned there are downgrades, yet the reverse is seemingly justified.

22 Jun 2012, 12:20 PM Reply Like

Netrilix Comments (2)

Quite simply, it's because the downgrades were already priced into the stock. People were expecting a three-notch downgrade, and the stock price already reflected it. Since it was not downgraded quite as far as expected, the stock price faced a correction upwards when people realized the company wasn't doing as poorly as estimated.

22 Jun 2012, 01:45 PM Reply Like

Rummeljordan Comments (457)

I do agree, a pretty twisted view if you ask me.

22 Jun 2012, 03:33 PM Reply Like

wil3714 Comments (335)

Moodys is just an opinion, this is the same ratings agency that rated CDOs & mortgage backed securities AAA so communities, countries, and institutions would buy these toxic assets.

Institutions pay ratings agencies to rate bonds so these ratings arent credible.

22 Jun 2012, 08:27 PM Reply Like

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