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Guys we'll make is the call option so it's it sounds like it's off the table buying at all -- and Charlie it's it's never been on the table.
It's been the media speculating how -- you know you talked about it for a week we have we have a game plan to buy 1415 and twenty.
It would take something extraordinary demo because -- -- -- thought I want to make it clear this is an interest in this is a news headline.
You don't intend you don't intend to buy the rest of it as of now.
I say do you what -- doing is we're exercising the fiscal option.
That's all we've committed to and we like the ability in by the risks of the business over the two year timeframe OK you you -- Dealing with -- she's got to be -- difficult thing I mean that they've let Moody's especially as have gone out and threatened to notch downgrade possible to notch downgrade.
Is that really in the cards a two notch downgrade that would -- one level above junk.
Actually they threaten a three not stand OK and not a -- to that would put us -- two level above -- so while not true the only big -- glad -- that's what you're the CEO but so.
Listen that firstly stepped back right Moody's.
Is re rating -- banks pretty much around the world they did -- -- last week.
I believe that -- on two Spain and Italy -- the next week or two and eventually they get into the global also banks.
And on average states say they gonna re -- all of the bank's two notches down.
And they actually said some.
-- -- -- problem could be up to three -- some could be up to one notch or -- -- write it down to the best my knowledge.
Lesson we've we've been living with ratings actions that he has -- -- -- -- They ended up leaving us at single label with -- not -- we had Fitch cut -- they ended up -- affirming us.
As an a rated institution so this is just one of the theory you know where they're gonna come out.
Now we don't we might not for several weeks the only ones they have from upon and so far -- believe this Portugal the Portuguese bank.
Steve accelerating the Smith Barney purchase of the brokers come into the reading your discussions are raining -- they offer an opinion on that.
Not we're not we're not engaged with them around acceleration Smith -- -- we we clearly.
Brigade -- binder says -- -- percent right I'm amber Coles.
Under the seat count we had to apply to the Federal Reserve so what we wanted to do.
Subjects he really presents what do we put -- -- we put -- to -- the 40% this year and -- fifteen exit that's what we gospel that's what we go to -- but don't you like the rest.
Get back on the same as everybody knows this about -- we do what's in the right interest for -- that's what you gotta do.
And my view is the right interest issue notices to stay on track obviously.
We listen to an extraordinary situation but that's not a plan that some my expectation -- -- situation OK very good.
You've been in the job since 2010.
Along BC itself in this job.
Oh boy and -- -- -- I'm not really thinking about the end of -- right now I think we're still of the beginning we -- we a lot of wood to -- we've done a lot of things over the last couple of years.
Am very proud of the way the management teams go behind this them and put it in a place where where winning position very strong management team Greg Fleming I think it's terrific running your broker -- -- column Kellogg -- car that was on the -- Greg Fleming -- -- -- it's a very strong management team that we have across of them.
So what I'm not really focus on when I'm gonna finished we a lot of what to do.
-- great comment on this morning it's soar in the results threats that kind of thing we want to show our shareholders consistently.
And then we move -- -- strength mom.
Did you ever think of expanding the firm in this environment and a lot of people talk about more accidentally buying.
An asymmetric and -- board Deutsche Bank's as a management.
Children business was up for sale up above you guys behind that is their right I don't think any of the big banks would be in a neck position any of the sixty banks could be -- -- -- -- mode now Muslim a conserving capital or of they've.
Using capital they doing for something like we -- with Smith Bonnie Wright or small dividend increase some -- done or small buyback.
Not a win win not interest in acquisitions right now -- Another story that's kind of adjusting your your compensation came out of me took what was at Kerr from -- of what that's right 13% there's some along well actually actually the compensation cut I believe was 25.
-- percent OK and comfort me twice and one day but that's my wife doesn't when he got so I would say that that's that's right problem.
Are you worried about of the compared the situation in which he basically that the shareholders -- -- said okay we don't like where you're stock is trading right hasn't done very well.
As you know not all your -- for your stock is down 30%.
Do you think your cut reflects a 30% cutting do you think you shareholders are gonna do with -- would Vikram the CEO of Citigroup and say.
You know it's a non binding vote but we don't like how much again.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- You know I don't out of one talk about what what happened at city say on pay reflects how investors feel about you -- plan that's a function complex.
We're very comfortable that comp plans we've -- -- thing we've ever paid.
We brought down -- -- -- this quota.
Lusty we have a lot of referrals we have strong pullbacks and we haven't had any push back frankly from -- -- -- summit site account to -- what what have from the other situation OK so you don't think you're gonna get.
But Vikram -- treatment -- -- your shareholders I don't think we're gonna have a say on pay.
You turned down whatever cannot I did not think that -- you know who is -- anybody -- -- the operating environment is is difficult to.
You know buying broke why would anybody want to buy brokerage stop now.
-- -- have you you buy things based on value not based upon excellence so whip where we have value FM is trading at point six tangible book.
On any -- may Asia.
It's a cheap stock right we have so trying to send the company Mitsubishi bank -- the strongest banks in the world.
Had a very strong quarter we'll make every 1000000003.
In earnings and operating with a -- send our way.
This this no justification of the saarc trading where it is except for the hangover from the financial crisis.
And the macro uncertainties I think these innings full -- pot of right the inflection point -- suspect to no reason why that's what he was should be bonds stock.
I don't like quoting Moody's because they're always wrong -- -- it -- which if as you know they missed the financial crisis why would they be getting Morgan Stanley right now but I would guess I would say this one of the issues they bring about.
Is the volatility of this business you have massive amounts of regulation -- you're you're up against.
You have you know who knows about the environment going forward you might have higher interest rates -- future which could hurt and help you.
In a sense Wall Street has to be remain lean and mean.
In terms of headcount and things of that if you're.
Has always rumblings inside your firm about and further headcount reductions him is is that the cards it's a possibility.
No it's not we're not we're not planning for the headcount reductions we've been very tight on non compensation expenses -- -- they were down you probably saw in the earnings this quarter.
We we we managed this them with a lot of discipline right.
And we manage it also for the future McKinsey background as well -- and I don't know that I've got I've got a great team that's what commit right but we -- it together with a lot of discipline.
And -- not a bad swing for the fences we I'm gonna maintain control costs and we will deliver the results very -- it's.
That sounds -- -- but let me ask you this if there was a financial credit and let's back up a little a couple months ago one of the reasons why you and I were talking is that.
There were rumors out there about your exposure to European debt which you quickly shut down.
And turned out the only -- they do rumors where we're -- exaggerating your your positions in European debt however did bring -- kind of a scary situation that.
You know suppose there was another financial crisis at a run on the bank where.
Where do your customers that lend you money particularly in your prime brokerage business which I understand you've -- most of them back.
If they started -- again as they did back in 2008 pulled their money that we could tap that -- resources.
Would Morgan Stanley be able to survive them.
Boy don't use that found that -- to restructure the prime brokerage business very differently so a -- has changed the short answer is yes of course we would.
But law does change mean just look at the facts but 20/20 3% of that balance sheet is liquid.
-- -- We've -- sixty billion dollars a capital we have a long term partnership with one of the -- its financial institutions in the world.
Of this a lot of things that we very different from we don't have proprietary trading businesses that we had -- -- had no way we don't have a hedge fund that we had to know it.
There's a law that is different and it's too simple to simply say wealth re redo the tape -- not the same sun.
We're different -- -- go to -- deal with that.
In content when you -- do that you realize yes if you look at what was done with that funding.
Look at how would tend Ed did you look at we have not reliance on Cho -- it's completely different institutions -- -- convince investors about that.
And this is not commits about the -- placement all of the bank stocks again all of the bank stocks.
-- down of the last couple -- is some element dramatically so.
I think the fact just talked I don't know where it is today but -- about 20% you today investors are starting to buy into the story from.
This study to believe the US financial system.
They're starting to -- the US financial system is much stronger the mall was commonly held to believe -- but just took -- -- -- -- -- that if -- and I believe that's true.
Before we wrap this up I'd like to ask you a political question.
In 2008 Wall Street heavily supported.
Then candidate Barack Obama over John McCain.
This year it looks like it's at least split or maybe trending towards.
Mitt Romney the presumptive nominee Republican.
What do you think Wall Street is gonna end up will they support the president in the end -- the -- do they have these as Wall Street have a problem with the present after four years.
-- willing to put lots of money in -- Romney campaign.
Well there are a lot of reasons why people vote that in just vote based upon the impact of might have on the industry and Wall Street -- it certainly.
Doesn't operate in unison.
Did last night.
Not not in unison but I think there was clearly.
Clearly reaction to the the previous eight years -- -- there's no question Charlie you -- that president.
I down at a high percentage of the vote than buy and happened Democrats in the trees -- is.
I think that -- that would clearly -- -- a little bit to get Walsh is gonna move more to war having to be more balanced and do you think it's because of class warfare I can't I can't speculate dome of white people.
You know why people vote the way they vote gonna support.
I'd never publicly -- -- my politics -- after.
Sometimes it slips but anyway I'm getting the hook here James thank you so much chart I did -- -- the big question why you always get mad at me when I -- you Jim.
Believe if we can get ninety of the answer yes.
I give events that I'm one of ten children okay okay and all my Brothers Komi gym.
And all my -- electorally something.
Even more fiction.
My -- calls me giants and I do what my mother tells you are right -- I'm gonna -- your mother's advice they've got guys back to you.
As well live all of this and others and vice trinity Charlie --
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