Wednesday, October 5, 2011

Morgan Stanley CEO James Gorman Pens Missive Attempting to Calm Employees Over "Confusion & Misinformation"

When the CEO sends out the company wide email downplaying rumors of the firm's imminent collapse, it's time to make sure you've updated your resume recently.
Clearly the entire market which is now pricing Morgan Stanley's CDS at a whopping 825 basis points is "confused" and "misinformed".

"Over the past few weeks, there has been an enormous amount of confusion and misinformation about Morgan Stanley and others in our peer group. In fragile markets, where fear triumphs over common sense, these things are bound to happen. It is easy to try to respond to the rumor of the day, but that is not usually productive. Instead we should let balanced third parties do their own analysis and let the facts speak.

To help you wade through the maze of numbers and information, it might be worth reading two analyst reports that were published this morning. One is from Howard Chen at Credit Suisse that examines Capital, Funding and Liquidity at Morgan Stanley and Goldman Sachs and, in some detail, highlights the dramatic improvement to our financial strength over the last three years. The other is from Matthew Burnell at Wells Fargo, who writes about Eurozone and Derivative exposure for the sector and plainly underscores that our exposure to the Eurozone and France in particular is not a concern.

I encourage you to stay focused on your job, remember that we are a client-focused Firm and do what you need to do to help our clients navigate this turbulence. It is in times like these when our professionalism, market wisdom and client focus are truly valued."