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Morgan Stanley Just Walks Away from Huge Mortgages
If you did that, they'd call it immoral
Over at The Agonist, Numerian offered up a short, powerful explanation of what's happened with Wall Street bailout recipient, Morgan Stanley. The former investment bank bought five properties in San Francisco as the market verged on a sharp downturn. Their value fell precipitously. The office buildings lost 50% of their value at purchase.
Numerian's piece shows that the cosmetic terms used to differentiate Morgan's “structured default” are no different than individual home owners who abandon their mortgages for purely financial reasons.
“Morgan Stanley doesn't look at it that way, not when it comes to its own behavior. It only expects you, the consumer and homeowner, to have moral attitudes about financial decisions. With the corporations, morality doesn't enter into it; it's just business. That is why it is very, very important for strategic defaults by firms like Morgan Stanley to be dressed up as something different - as a negotiation done voluntarily for mutual agreement. And after all, Morgan Stanley itself isn't going bankrupt, just the subsidiary that bought these properties is acting like it's bankrupt.
ee Morgan Stanley Defaults, Numerian, The Agonist
Morgan Stanley received $10 billion in federal bailout funds as Wall Street high fliers faced collapse. in 2008. Just months after the citizen subsidy, Morgan gave 438 executives seven figure bonuses.
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