We are fans of Morgan Stanley CEO John Mack, but we were annoyed by his description of the incineration of $9.4 billion as "embarrassing." It's not "embarrassing." It is a disaster.
Morgan Stanley is 72 years old. It took the firm 72 years to build the value it had last July, before Mr. Mack's mortgage trading desk's crazy mortgage bets went bad. And those bets went so bad that, after five short months, Mr. Mack had to sell up to 10% of the company's equity at a 50% discount just to preserve the company's capital ratios.