And so Wall Street continues to not grasp that as long as the vast majority of people realize just how manipulated and broken the market is, they will simply stay out of it. Today, Gasparino breaks the news that Morgan Stanley has instituted a hiring freeze and that if the current volume drought which will certainly wreck EPS for Q3, persists in Q4, the firm will follow up with "fairly significant cuts." Since we don't anticipate the corrupt regulators to do anything that will return confidence to capital markets (and no, Brian Sack, closing the market by one penny in the green will not help), and since the 2s10s will continue to flatten, the pain for banks will only get worse and worse. Add on top of that the likelihood that very soon the FASB may require banks to report the actual MTM value of their hundreds of billions in underwater loans, and it becomes increasingly obvious why financials will soon be the industry that drags the entire market much lower.
From Fox Business: