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

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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Comments (4)
  • CaladesiKid2
    , contributor
    Comments (276) | Send Message
    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
    , contributor
    Comments (2) | Send Message
    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
  • Ben Bernankes friend
    , contributor
    Comments (473) | Send Message
    I do agree, a pretty twisted view if you ask me.
    22 Jun 2012, 03:33 PM Reply Like
  • wil3714
    , contributor
    Comments (2214) | Send Message
    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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