Wednesday, September 17, 2008

Report: Morgan Stanley CEO: Quote Corrected

by Calculated Risk on 9/17/2008 09:45:00 PM

UPDATE: The NY Times has corrected this story:

Editors’ Note
An earlier version of this article cited two sources who were said to have been briefed on a conversation in which John J. Mack, chief executive of Morgan Stanley, had told Vikrim S. Pandit, Citigroup’s chief executive, that “we need a merger partner or we’re not going to make it.” On Thursday, Morgan Stanley vigorously denied that Mr. Mack had made the comment, as did Citigroup, which had declined to comment on Wednesday.

The Times’s two sources have since clarified their comments, saying that because they were not present during the discussions, they could not confirm that Mr. Mack had in fact made the statement. The Times should have asked Morgan Stanley for comment and should not have used the quotation without doing more to verify the sources’ version of events.
This NY Times article has an explosive quote attributed to Morgan Stanley CEO John Mack: As Fears Grow, Wall St. Titans See Shares Fall
Seeking to avoid the kind fate that led Lehman and Bear Stearns to collapse, John J. Mack, Morgan Stanley’s chief executive, made an unsuccessful attempt Tuesday evening to convince Citigroup chief executive Vikram S. Pandit to enter into a combination, according to people briefed on the talks.

“We need a merger partner or we’re not going to make it,” Mr. Mack told Mr. Pandit, according to two people briefed on the talks. Mr. Pandit, a former senior investment banker at Morgan Stanley, said Citigroup was not interested. [Citi] is thinking of deals it can strike with consumer banks, like buying Washington Mutual out of bankruptcy, that would provide it with cheaper deposit funding.
emphasis added
Also according to the article, Mr. Mack has been complaining to regulators about short sellers spreading rumors. If that quote is accurate, then Mr. Mack has just given short sellers plenty of ammunition.