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Ticker Shock: Morgan Stanley Turns Japanese, Sovereign May Learn Spanish


Monday's top stories and stocks with potential to move.


With about 15 minutes left in the session on Friday, it looked like we were going to end the week on a positive note. Seriously, I was jazzed. But no luck.

We can only hope today is better. The Hang Sang was up over 10%, Europe is green, and the Dow and S&P are up sharply at the open.

Also, word has it that the Brits are injecting billions into their big banks. Moreover, there's talk that a stimulus plan here in the States could occur after the election.

Here's what I'm seeing today.

General Motors (GM)
There's been chatter that the company's in talks with Chrysler/Cerberus. The speculation is that Cerberus would take GMAC, while GM would combine forces with Chrysler. The assumption is that the 2 could potentially save gobs of money through layoffs and factory closures.

My take: I think this is kind of like putting 2 sick people in a room and hoping they'll get better. Isn't it a little too late for this? Could the 2 generate enough "synergies" quickly enough to save the day? I'm skeptical that combining forces is the answer at this point, and I plan on steering clear.

Morgan Stanley (MS)
Hot off the presses: Mitsubishi UFJ Financial Group just bought a 21% stake in Morgan for $9 billion - $7.8 billion in perpetual non-cumulative convertible preferred stock and $1.2 non-convertible preferred.

Long story short: I think that the stock will pop on the news. After all, Morgan Stanley needed this dough. The bad news: The preferred is a hefty price to pay. (As an aside: if I were long Morgan Stanley I'd probably use a bump up today to bail.)
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No positions in stocks mentioned.

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