Nov 30

In other news:

Federal Reserve ends ‘too big to fail’ lending policy


Morgan Stanley Throws In The Permabullish Towel, Says It Is “Feeling Worse, But Not Sure Can Explain It””:

Stiffer capital rules, a slump in client transactions and a shift toward electronic trading have crimped margins in key fixed-income markets, pushing banks to pull back and eliminate staff… and amid a 42% collapse in fixed-income revenue in Q3, Morgan Stanley is taking action:

  • *MORGAN STANLEY SAID TO PLAN FIXED-INCOME JOB CUTS OF UP TO 25%

The cuts are said to be worldwide and will happen with two weeks (just in time to watch the carnage unleashed by The Fed).

As Bloomberg reports,

Morgan Stanley, the investment bank that saw bond-trading revenue plunge 42 percent in the third quarter, is planning a significant reduction in its fixed-income staff, according to people with knowledge of the plans.

The cuts, which could total as much as a quarter of fixed-income trading employees, will be across all regions and are set to take place in the next two weeks, said two of the people, who asked not to be identified because the decision hasn’t been publicly announced. Hugh Fraser, a spokesman for the New York-based bank, declined to comment.

“The trick for us is to size our business appropriately to what we think the fee pool is,” he said at the conference. While trying to gauge that, the investment bank needs to keep the unit “credibly sized” to complete globally, and “make sure we have enough flex or leverage that when the markets recover, which we do think they’ll recover, you’ll be able to participate in the upside of that,” he said.

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So – the future does not look bright then?

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