Is Morgan Stanly the next Bear-Lehman ?

Could the investment bank Morgan Stanley MS be the next Bear Sterns / Lehman Brothers style financial blow up? It is down well over 50% from its year high, with much of the loss being recent. Today there was some rather noticeable options action on the $5 strike puts ( MS options from Yahoo ). This is quite similar to options action that happened before the failures of both Bear Sterns and Lehman brothers. Those of us who were interested back then remember well how Lehman and Bear went down. Bankruptcy bets in the options, Cramer saying your money is safe, Asian Banks, and Buffet bailout rumors; you see everyone of these in MS at the moment.

The Market Ticker is saying that another Lehman style credit event could be imminent.

This gamesmanship is exactly how Bear Stearns and Lehman went down. It is starting again, and the market does not believe that these firms have any money. Morgan Stanley is trading at 0.45 times book - that is, one half of the claimed book value. That's ridiculous. Either the company is in fact worthless or the attacks on their stock and credit are bogus. The market is going to force another credit lockup if the lying -- perceived or real -- does not stop.

From Market Ticker Blog

There is plenty of angst in markets worldwide right now. European Banks, European Sovereigns, China and its need for ridiculous growth, and US gridlock. A Lehman size event could be the impetus for the next swirl downward in the Global Economic Meltdown.

I see that a few of you that were around then are still here. What do you guys think?

reply to post by jefwane



I love the end quote to that ' The market is going to force another credit lockup if the lying -- perceived or real -- does not stop.'....Just has to be lie, a company would never lie about it real value.