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FBN's Charlie Gasparino on Morgan Stanley executives scrambling to quash rumors after a selloff in the bank's stock yesterday.
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Telling off slightly today are at Morgan Stanley stock also down this week amid worries of a massive exposure Europe.
Check on the stock though it's recovering today at 58 cents thirteen 64.
Is that because the -- CEO James Gorman came to the rescue which I guess.
They have explicit details after his conversation with mr.
right I would -- I would love nothing -- that to -- Morgan while it's down but.
That at -- but.
It's not doubt that it's up and one of the reasons why it's up the -- network has learned I just got off the phone James Gorman is that yesterday there was a run on the stock no doubt not a run on the bank.
Levered to does it run on the bank and investors pulling money particularly at a prime brokerage accounts He pleading these banks of much needed capital.
It was clearly something go -- gold room at Morgan Stanley yes they not that severe.
But a run on the stocky so it shares fell to the lowest level I believe since the financial crisis credit default swaps which is the insurance policies on a debt.
Soared to levels not seen in three years maybe not fight not maybe not.
Nuclear levels of financial crisis but right after that.
What informant do two things He -- -- article -- analysts' first close to Dick -- -- annals Roche still securities He also called ugly kind of scouts get Maryland should other houses say listen.
We don't have -- explosion of French banks this is a rumor.
The rumor started on a blog post.
We are okay in that regard He -- that's a pretty unusual step you generally don't see this the FC EOs quashing rumors despite -- -- -- -- -- -- -- You know at least people think -- why is He calling me up you must be worried about something.
Bob Gorman did do that the other thing He did was pretty interesting -- that not.
Buying back stock from what we understand the Fox Business Network and learn that more is -- went out and what back its own debt.
You know because you if you can't roll over your commercial Paper if you can't sell debt.
You learn much when you're you're in very bad -- every bit shipping a lot of these companies you know basically finance themselves these banks Wall Street first.
By selling -- so He went out and what debt to show that they have the financial wherewithal to survive this pretty -- those two things combined.
The stock is up today they got to positive reports which we should point happened to -- reports came.
I believe in the first two Reynolds sequel obeying god must -- suppress the product by surprise but He laid out the case -- why they're not being exposed.
To the French banks despite what the rumor and -- -- was started from some blog -- its interest in.
-- blog postings like that can really take a life of their own markets -- -- out of the blue because you know Moody's downgraded credit what was it my don't wanna get this wrong Citi and wells earlier this close Bank of America and Bank of America Bank of America's long term debt but -- -- the biggest hit.
Citi and wells those of banks.
Listen album yet all the banks are facing issues no doubt they -- a profit drought on Wall Street no doubt.
But you know.
That and that the selling that occurred yesterday.
Now this is selling when I take -- same people pull money out of out of the out of the bank.
It smelled like 2008 levels it went down -- shares -- -- 121000 ship it in all fairness it was brutal market yesterday broad market weakness of the -- everything -- -- in the best best -- balance.
Morgan Stanley I believe was down 12%.
I could be wrong -- a check this.
You know the other banks were down 3%.
And I remember talking at Bank of America watch out when it falls below seven dollars and -- it's been trending at that level well or no -- much level lower BankAmerica could go sometimes but I -- say this about Morgan Stanley it's an interest in firm.
In a sense -- this is why it's kind of interest in that they took this hit.
-- -- -- it because they're an international firm the rumors they have they have exposure to the French banks which are faltering.
Gorman has gone on the record now -- net no exposure.
Bomb this is a firm that is in a deleveraging less risk.
So remote remember they are going -- would vice they're going to -- the emphasized -- brokerage business the biggest brokerage firm in the country Morgan Stanley fuel dean Witter.
Now they just what Smith Barney brokerage departments of that they have 181000 brokers it's about dispensing advice they're focusing on investment banking which is in a vice oriented stuff.
A business model they are not in the risk taken -- which is interested in how this whole thing.
Happened I have to ask you this move a buying zone debt Gorman by Morgan and debt and that's pretty brilliant if you think about to think we'll start seeing -- now because that's how a building confident you know I I should point -- that.
You know what we're talking about Morgan Stanley here right Morgan Stanley.
Is -- is in the cross -- is the focal point I'm sure these firms periodically do that you know do that the ship the first show strength.
That's one of the sort of -- things that some of the people Morrissey would try to tell me this isn't that unusual but it is unusual because it's Morgan Stanley and because yesterday.
They had to do it and that's what they did this is a fascinating discussion -- Charlie thank you.
Our Palestinian President Mahmoud Abbas in New York pushing for Palestinian statehood today -- next look at what's at stake for the region and what it means for the united stay.
