Quotes About Morgan Stanley

Last summer, after Groupon selected Goldman Sachs, Morgan Stanley, and Credit Suisse to underwrite its initial public offering, the trio valued Groupon at a generous $30 billion. Subsequent accounting and disclosure problems showed this estimate to be absurdly high. But the banks didn't care a whit. The higher the valuation, the fatter their fees.

By May 2007, however, there was a growing dispute between Howie Hubler and Morgan Stanley. Amazingly, it had nothing to do with the wisdom of owning $16 billion in complex securities whose value ultimately turned on the ability of a Las Vegas stripper with five investment properties, or a Mexican strawberry picker with a single $750,000 home, to make rapidly rising interest payments.

We fought with those cocksuckers all the way down," says one Deutsche Bank trader. And, all the way down, the debt collectors at Deutsche Bank sensed the bond traders at Morgan Stanley misunderstood their own trade. They weren't lying; they genuinely failed to understand the nature of the subprime CDO.

Scarecrow often would take me aside and explain that he lived by two simple rules. First, perception is reality. Second, trust but verify. Each of these rules, he was proud to say, he had learned during the most enlightened period in the history of the United States—1980 to 1988—from the most enlightened man alive during that period. Scarecrow believed Ronald Reagan was God, and at Morgan Stanley he wasn't alone.

FID employees sold and traded bonds, including government bonds, junk bonds, mortgages, and emerging markets debt. FID salesmen and traders took huge risks, and FID profits were much more volatile than those of IBD, but when Morgan Stanley had a really good year, it was because of FID. FID was on the trading floor, where there were no flip books. A new sales-and-trading associate had only three tasks: (1) Feed your boss, (2) withstand abuse, and (3) learn.

These were heady days at Morgan Stanley. No one seemed to care about how risky many of the hundreds of derivatives deals were. No one seemed to care about whether clients actually understood what they were buying, even when the trades had hidden risks. The group simply continued to pile trade on top of trade. Year by year, client by client, trade by trade, the venerable House of Morgan was building a precarious house of cards.

I couldn't understand how they had lost so much money. When you bought stock in one of these companies, what were you buying? A manufacturing company or a derivatives speculator? How could you tell the difference? In each case, the DPG salesmen vowed that they had not sold any of the exploding derivatives. In each case, rumors bounced throughout the firm, then died. It appeared that Morgan Stanley had dodged these bullets, too.

After I finished university, I was gigging as a comedian in London as well as temping for Morgan Stanley during the day.

from Morgan Stanley, which was a pretty uptight firm in those days," recalled

In the way that everything on Wall Street was rank-ordered, with a heavy overlay of social class, trading was a lower activity than what Morgan Stanley did, the province of smaller and, to be frank about it, Jewish firms, in the same way that having clients who were in retailing or media, rather than industry, was lower, and also Jewish.