Morgan Stanley: The Other Side of Wall Street
Food for thought at Lincoln Center in New York.
While I left Mother Morgan in 1997 to try my hand on the buy side, my tenure served me in good stead. I learned a craft and built a skill-set that would not only define the time I chased the cash register, but the many years thereafter when I devoted my energies to affecting positive change through financial understanding. That mission remains pertinent now more than ever, from the ABC's to the 401(k)'s.
A few months ago, I was asked to become more involved in the Morgan Stanley Alumni Network. Given the venomous blame brushes painting the industry, the easiest decision would have been to say, "Thanks, but no thanks." Wall Street is in the cross-hairs, as the protests downtown remind of us daily -- and now more than ever -- you're a reflection of the company you keep.
As I listened to the principal players define Morgan Stanley's vision for the future -- and in particular, their focus on providing financial literacy to the next generation of investors -- I found myself increasingly intrigued by the potential fit. I watched, listened and absorbed numerous discussions through the lens of "if you're not part of the solution, you're part of the problem." While some would have ended the conversation there, I realized it had only just begun.
This morning, at the request of the Alumni Network, I attended a Lincoln Center Dialogue Breakfast, The American Economy: Bullish or Bearish, with Greg Fleming, President of Morgan Stanley Smith Barney and Blair Effron, Co-Founder of Centerviews Partners. The conversation was moderated by Tom Brokaw and as you might expect, Mr. Brokaw dialed up a provocative discussion.
They spoke of the inevitable de-leveraging we're chewing through, income disparities, the chasm between Wall Street and Main Street, implications of social mood, the need to re-teach children the building blocks of financial understanding (I was on the edge of my seat), and the necessity of politicians to meet in the middle (taxing the wealthy, cutting entitlements). All of these topics are familiar fare for Minyans in our midst.
When they opened the discussion, I sprang from my seat and posed the question that keeps me up at night. "With regard to policy directive, both stateside and abroad, during the first phase of the financial crisis and during this sovereign sequel, have we, in your view, seen drugs that masked the symptoms or medicine that cured the disease -- and if it's the former, what does that bitter pill look like?"
Mr. Effron responded first, offering that we took our medicine in 2008 and Europe is currently enduring a similar process. As they're a collection of nations -- as opposed to a unified entity -- there are obvious and natural challenges that exist across the pond that we, as a country, were able to avoid.
Mr. Fleming opined that the drugs were needed to keep the patient alive (my analogy, not his) and that has now provided the necessary time for the medicine (in the form of de-leveraging) to soak into the system. This is a process, in his view, due to the enormity of the economic condition, a statement with which I most certainly agree.
I've been pondering the latter point since I left Lincoln Center. We often use the "drugs vs. medicine" analogy but perhaps they're not mutually exclusive. Maybe, to Mr. Fleming's point, we needed to buy time to facilitate the process of reducing the leverage and debt in the global financial machination. The "how" is clearly more important than the "what," but I was pleased to find we're on the same page in terms of what needs to be done.
I'm sure this column won't earn me points from those suffering in middle America or the other side of the world, but I've long said that my opinion isn't for sale and I tell it like it is, for better or for worse. While the easiest thing to do is vilify anyone within a stone's throw of Wall Street, I'll tell you first hand there are decision makers who "get it" and legitimate thought leaders who intend to pave a positive path for future generations.
Am I drinking the Kool-Aid? I don't think so; I'm realistic about what needs to be done and continue to expect a tough few years before a fertile back-half of the decade.
Rather than climb aboard a populist bandwagon and toss fuel on an already raging fire, however, I prefer to explore potential solution sets and identify those intent on forging a pathway to better days. That human capital, as I learned this morning, may be a lot closer to home that I previously thought.
As always, I hope this finds you well.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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