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Morgan Stanley Shutting 300 Branch Offices Due To Declining Order Flow As Investors Sit On Cash

Tyler Durden's picture


We get a glimpse into the latest leading unemployment indicators courtesy of Fox Biz' which notifies that Morgan Stanley in addition to previously reported job cuts, will also be shutting another 300 branch offices and cutting as many as 1,200 jobs over the next year in an attempt to reduce overhead. The primary reason for this: "there has been a significant slowdown in small investors turning to brokers to execute orders; many investors are sitting on cash because they are fearful of the recent volatility in the markets. Because of the declining retail order flow, every major brokerage firm will have to cut staff, Morgan even more so because of the overlap from the Smith Barney acquisition." Apparently promises by the SEC and the quant/HFT community that the May 6 crash will never, ever repeat again are insufficient to placate the investing population which is now justifiably turning its back on equity investments, as seen by last week's massive ongoing outflow from domestic equity mutual funds. Absent Obama making another March 2009-like appearance discussing attractive "profit and earnings ratios", we don't see a material catalyst to change risk perceptions.

More from Fox Business:

With the merger, Morgan will have 18,000 brokers, and will be the largest sales force on Wall Street, ahead of long-time leader Merrill Lynch, now part of Bank of America (BAC: 15.04, -0.2875, -1.88%), which has about 15,000 brokers. The spokesman also said that the firm is adding other new support staff, such as a "private banking business," designed for brokerage customers.

However, people close to the firm, say the cuts are real, and they've been serious. Morgan purchased Citigroup's brokerage unit, known as Smith Barney, in early 2009, at a time when Citi was losing money and needed to raise cash to survive. Morgan's move was designed to bolster its advisory business at a time when Wall Street began to reduce trading activities following the 2008 financial collapse. Many of the biggest Wall Street firms, including Morgan Stanley, needed a government bailout to survive the collapse after trades went sour.

Since then, there has been a significant slowdown in small investors turning to brokers to execute orders; many investors are sitting on cash because they are fearful of the recent volatility in the markets. Because of the declining retail order flow, every major brokerage firm will have to cut staff, Morgan even more so because of the overlap from the Smith Barney acquisition.

Now, some people at Smith Barney say the cuts have hit their side of the deal harder than the Morgan Stanley side. And it's not just so-called support staff that may be getting the ax, FOX Business has learned. Both Smith Barney and Morgan Stanley have research analysts who write up reports for retail customers, and those jobs have also been targeted for the cutbacks, according to people close to the matter.


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Mon, 06/07/2010 - 12:32 | 399823 schoolsout
schoolsout's picture

hmmmm, do we have a list of locations/whatnot yet? 

Mon, 06/07/2010 - 12:43 | 399847 Careless Whisper
Careless Whisper's picture

no. you don't. because closing 300 branches will result in way way more than 1,200 jobs being eliminated, but that will help the bottom line, but not be very good for public relations.

Mon, 06/07/2010 - 13:05 | 399906 pan-the-ist
pan-the-ist's picture

. <- Worlds smallest violin for the complicit bastards that took 4% of my savings and gave the rest to their parent company who gambled it in the Wall Street casino.

Time to learn how to be productive members of society (after you spend 2+ years collecting funemployment.)

Mon, 06/07/2010 - 16:50 | 400399 Ripped Chunk
Ripped Chunk's picture

Heart wrenching stuff

Mon, 06/07/2010 - 21:19 | 400770 Rick64
Rick64's picture

You've been playing the violin a lot lately.

Mon, 06/07/2010 - 12:36 | 399831 papaswamp
papaswamp's picture

"milka whaaa?"

Mon, 06/07/2010 - 12:37 | 399832 SDRII
SDRII's picture

But Schwab's super shill Liz Ann Sonders said we are in a bull market and retial investors are flooding the markets. David Bianco and Sonders in a game of battleship

Mon, 06/07/2010 - 13:15 | 399946 sgt_doom
sgt_doom's picture

Oh wow....say it ain't so!!!

This completely destroys faux liberal and faux democrat Dean Baker's repetition of those talking points from the  National Association of Manufacturers, and Business Roundtable, and Financial Services Roundtable; namely that the cause of high unemployment in the U.S. is unemployment benefits.

Who would've thunk it?????

So, if those analyst jobs are no longer, what are all those unemployed people holding out for now???

Effing Dean Baker and all the rest of those faux libs are have never been serious and authentic democrats.

Airhead America, are you listening????

Mon, 06/07/2010 - 14:07 | 400073 Citizen of an I...
Citizen of an IKEA World's picture

Err America can't here you.  It's dead, Jim.


Mua ha ha ha ha ha ha!

Mon, 06/07/2010 - 16:09 | 400308 lilimarlene1
lilimarlene1's picture


Mon, 06/07/2010 - 12:37 | 399834 LoneStarHog
LoneStarHog's picture

But...but...just last Saturday on CNBS Ms. Suze Orman told her viewers to NOT sit on their money and ignore the markets due to fear...She said that if you do not need the money "right away" that it should be invested in the market, specifically STOCKS...She did suggest a company that pays a dividend, however how many times have we seen stocks plumet and the dividend is reduced and/or eliminated...Hurry, ladies, buy, buy, buy, cause Suze is a FEMALE and she knows soooooooooooo much more than any, buy, buy !!!!!

Mon, 06/07/2010 - 12:55 | 399876 Bam_Man
Bam_Man's picture

Suze is an "out-of-the-closet" Lesbian.

When she refers to one of her callers as "girlfriend", she really means it.

Mon, 06/07/2010 - 12:58 | 399887 homersimpson
homersimpson's picture

If you followed Suze's advice to the T in each of her books, you'd be way past bankrupt right now. Suze is the Robert Kiyosaki of finances.. and the most pathetic thing about her is that most of her money is tied up in fixed-income securities. Hypocrite.

Mon, 06/07/2010 - 13:07 | 399907 ydderf1950
ydderf1950's picture

+1000 and dave ramsey

Mon, 06/07/2010 - 13:50 | 400035 Brett in Manhattan
Brett in Manhattan's picture

FOX Business needs to lose Ramsey's call in show or at least have a hot chick sit next to him while take calls for an hour and answers them in a monotone.

Mon, 06/07/2010 - 14:19 | 400103 Conrad Murray
Conrad Murray's picture

Agree.  Give Charles Payne his own show.  And/or snag Rattigan from that other shithole network.

Mon, 06/07/2010 - 16:14 | 400323 lilimarlene1
lilimarlene1's picture

The problem with Fox is all they have are hot chicks that look like blonde unit a, b, or c. Entertainment Tonight level of talking head. Can't we have an Emma Peal type?

You know, like what about an intelligent lady?

You either have to be a dyke or a bobblehead today; both cartoon characters.

How about real people? There are some who are both intelligent and camera friendly without being robot units.

Mon, 06/07/2010 - 16:14 | 400324 lilimarlene1
lilimarlene1's picture

The problem with Fox is all they have are hot chicks that look like blonde unit a, b, or c. Entertainment Tonight level of talking head. Can't we have an Emma Peal type?

You know, like what about an intelligent lady?

You either have to be a dyke or a bobblehead today; both cartoon characters.

How about real people? There are some who are both intelligent and camera friendly without being robot units.

Mon, 06/07/2010 - 20:36 | 400731 DosZap
DosZap's picture

Ramsey is a smart cookie, except in this currrent situation he seems to continue giving advice for the run of the mill economies of yester year...........out of debt, sure,save sure, just make sure it saving/purchasing  the right ASSETS.

Mon, 06/07/2010 - 20:33 | 400727 DosZap
DosZap's picture

This will fix the budget crisis.......the Pols are coming around..

Funny what FEAR will do to a Politician.........

Tue, 06/08/2010 - 05:22 | 401137 russki standart
russki standart's picture

I had the great misfortune to read a few chapters from one of her books because i was visiting a friend and needed to borrow some reading material prior to a flight. His wife is a feminist (hence very ugly) and only had Sue Lesbo's books available for loan.  Gawd, what drivel, safe, invest for the long term, be diversified, your husband will likely die before you so be prepared, blah, blah, blah. No wonder there are so many donators for the rigged gambling gaming called the US stock markets.


Hmmm, on second thought, maybe I like Susie...

Mon, 06/07/2010 - 12:39 | 399836 unwashedmass
unwashedmass's picture


they can't fire the analysts!!! No....who is going to make up the stuff to read on CNBC? I mean some of these people have years of experience working in the fantasy industry....

Mon, 06/07/2010 - 12:39 | 399838 rrbluefin
rrbluefin's picture

No doubt many retail investors are sitting on cash but what wasn't mentioned is the exodus to online brokers. Why should I pay "full boat" commissions to the likes of Morgan Stanley when I can execute the same trade for under $10 somewhere else? Full service brokers may one day join buggy whip makers.

Mon, 06/07/2010 - 13:38 | 399997 clotario
clotario's picture

I haven't made a trade in YEARS thanks to a perpetual all-class asset bubble. Was I right? No. But I was prudent, and apparently other investors are reading the tealeaves the same way.

Mon, 06/07/2010 - 13:47 | 400028 Brett in Manhattan
Brett in Manhattan's picture

This is true. Fortunately for Morgan Stanley, it can fall back on its core business: market rigging.

Mon, 06/07/2010 - 12:40 | 399839 lizzy36
lizzy36's picture

No wonder retail investors have no confidence. One month after the flash crash, weget the brilliant statement from the CEO of Finra:-FINRA CEO SAYS ALGORITHMIC TRADING MORE LIKELY BEHIND CRASH.

I am fairly certain that Mr. Durden said that about 15 mins after the crash occurred.

One is fairly amused that this news came out as John Mack was on the new seizure inducing CNBC strategy session, pumping the general well being of the American Banks. 

Mon, 06/07/2010 - 12:46 | 399854 schoolsout
schoolsout's picture

Lizzy, do you have a link to that?  I missed it, but would like to forward it to some numbskulls that air on the radio in the AM who have ignored most everything I send them and now claim that because I am long gold, I am expecting worldwide catastrophes....


which, by the way, I am....

Mon, 06/07/2010 - 12:55 | 399875 UGrev
Mon, 06/07/2010 - 13:12 | 399923 knukles
knukles's picture

Isn't it just amazing, the way the LSM and public share with such equanimity, the tales and falsehoods of truth? 
Raise any topic seemingly out of the ordinary and become tagged as a Conspiracy Theorist, Tin Foil Hatter, Kook, Nut, Crazy, whatever.
Then sure as hell, weeks, months or years later, it makes its way into the LSM and everybody simply takes it as a given, for granted, fine and dandy Andy.
Tell folks 5 years ago, the Magna Carta and Bill of Rights were shredded, HFT and Flash Orders were driving the market, Gold and Silver were manipulated and people thought I/we were F*ing crazy.
To paraphrase Madoff, F* my detractors.  T'was always best to be outside the consensus in some form, anyhow.

Mon, 06/07/2010 - 13:15 | 399942 schoolsout
schoolsout's picture

I've got a "buddy" that is a MS bond guy

I post a lot of ZH and other like material on a local fishing forum in the econ forum and get laughed at buy this guy....only to have months later, as you state, facts come out in the MSM stating what should have been known....and since he is in the "biz," he is always right according to other members there.  Chaps my ass, but they will reap what they sew.



Mon, 06/07/2010 - 14:59 | 400193 centerline
centerline's picture

You are just early to the party, like most of us. Sucks to be early. But at least not ignorant.

Mon, 06/07/2010 - 12:45 | 399851 cognitis
cognitis's picture

Brank offices house retail financial consultants not execution brokers, and the cited 300 offices would house over 10,000 retail brokers and thousands additional back office staff.

Mon, 06/07/2010 - 12:49 | 399863 Bam_Man
Bam_Man's picture

But wait a minute. I definitely heard Betty Liu say this morning on Bloomberg that "getting back above Dow 10,000 is key to bringing the retail investor back into the market".

And since we are a mere 70 or so Dow points away from that critical level, I'm thinking this must be a great time to buy stocks. Right?

Mon, 06/07/2010 - 13:14 | 399933 knukles
knukles's picture

Or get your Series 7 and apply as retail sales rep at Morgan Stanley. 

Mon, 06/07/2010 - 12:50 | 399866 spartan117
spartan117's picture

Who trades via full service brokers anymore?  Anyone paying $400 per trade for "advice" deserves to lose all their money.  You have fifty online broker/dealers that will charge you $4 to execute a transaction for you.  Wire houses are dinosaurs unless you are a high net worth client that needs access to multiple markets/products.

Mon, 06/07/2010 - 12:58 | 399885 Bam_Man
Bam_Man's picture

Who trades via full service brokers anymore?

My girlfriend's 86 year-old grandmother.

She also drives a Buick.

Mon, 06/07/2010 - 13:02 | 399896 spartan117
spartan117's picture

While her broker drives a Mercedes S600...

Mon, 06/07/2010 - 12:59 | 399889 primefool
primefool's picture

Exactly - these MS types are only useful if you want to buy , say, new Zealand inflation indexed bonds while shorting 10 year Treasuries. Try doing that kind of think online. And by the way most of these new ETFs , especially the leveraged inverse ones are Crap. They should be banned. They sucker naiive retail investors into thinking they are equivalent of being short - which they most definitely are not.

Mon, 06/07/2010 - 14:23 | 400111 TonyV
TonyV's picture

And by the way most of these new ETFs , especially the leveraged inverse ones are Crap. They should be banned. They sucker naiive retail investors into thinking they are equivalent of being short - which they most definitely are not.


Can you please explain this? I am curious to know exacly how they work. Any links would be appreciated

Mon, 06/07/2010 - 21:24 | 400780 Rick64
Rick64's picture

ETF's  are a scam.

Mon, 06/07/2010 - 13:02 | 399897 Duuude
Duuude's picture


Tha masses are not trading.

Tha masses' bullshitmeter redlined.

 Tha masses are liquidating their accounts everywhere.

Tha masses are in survival mode.

Mon, 06/07/2010 - 13:17 | 399952 sgt_doom
sgt_doom's picture

I believe the technical term is a "decomposing society."

Mon, 06/07/2010 - 13:09 | 399917 Common_Cents22
Common_Cents22's picture

Many do.  Think of all the boomers and older that don't use computers.  My dad for one.  He had "wealth" advisors from one of the big banks.  He is 75 and they had him in all stocks.  They also put him into HELOCS backed by his investments for two investment homes rather than separate mortgages.  When th emarket tanked they of course sold him out at the bottom and wiped out millions to cover the "declining" property value.

Mon, 06/07/2010 - 13:05 | 399905 ozziindaus
ozziindaus's picture

If a fishing pole is to fishing as a broker is to investing and a polluted stream is analogous to a corrupted market, then the only beneficiaries are the retailers and service providers.

Mon, 06/07/2010 - 13:07 | 399913 AxiosAdv
AxiosAdv's picture

I think major firm brokers in the traditional definition will go the way of the dodo over the next 5 years.  Too many conflicts of interest within these megafirms.  RIA's away from the major wirehouses will eventually become the go to people (assuming regular folks still want to invest) because their interests are more aligned.  I also think that long only mutual funds will continue to see declines in their business as they are dinosaurs and "retail" hedge funds will become more and more prevalent.

Mon, 06/07/2010 - 13:10 | 399926 Joe Shmoe
Joe Shmoe's picture

This announcement is just MS taking advantage of the market to jettison staff they were already planning to.  With the SB acquisition, MS only wants the assets, not the brokers.  

As for everyone going to etrade, I don't agree.  People with small accounts trade for themselves.  Those with bigger accounts lose confidence, and use, in one form or another, some type of advice.  

Mon, 06/07/2010 - 13:12 | 399930 n2dark
n2dark's picture

What are they talking about ?! doug (k)ass, fast (losing) money crew and a few other gurus are still "building positions", abby is telling us how high we can go, mr. yobs sees ipads replacing everything, voluntary unemployment shows confidence ...

With this level of denial, spx500 in the low 300's is the next major turning point.

Mon, 06/07/2010 - 13:14 | 399941 williambanzai7
williambanzai7's picture

No doubt those brokers will be retooled as oil spill cleanup specialists.

Mon, 06/07/2010 - 13:21 | 399968 LoneStarHog
LoneStarHog's picture

Advice to out-of-work crooks -- err I mean brokers:  When you are unemployed with little money, it will be a great time to buy, buy, buy!!!

Mon, 06/07/2010 - 13:28 | 399978 economicmorphine
economicmorphine's picture

Dear Wall Street:

Spin it any way you want, but I am a small investor and you can color me gone.  I have come to realize, rather late in life, that you are a criminal enterprise.  When I lose on a trade, I take a loss.  When you lose, I bail you out.  Why would I continue to play a rigged game?


It will take you decades, maybe generations to earn back the trust you lost.  I am 50.  I am gone, dead to you.  I understand now that what you call investing I call thieving. 

You did it to yourselves, boys and girls.  Now you can play with yourselves, something some of you are very good at.  You have, by and large, lost investors like me and we are not coming back.

Read about King Midas you dumb fucks.  That's you.


Mon, 06/07/2010 - 13:43 | 400018 Brett in Manhattan
Brett in Manhattan's picture

Unfortunately, this has always been the game. The lion's share goes to the house with the rest of us fighting each other for the scraps.

Mon, 06/07/2010 - 16:13 | 400320 Auric Goldfinger
Auric Goldfinger's picture

I'm gone as well.  In my 30s.  Assholes are losing, what, maybe 30 years worth of my money (hopefully)?  Oh, and a lifetime of my son's money if he chooses to follow Dad's philosophy.

Foot, meet lead.




Tue, 06/08/2010 - 05:29 | 401138 russki standart
russki standart's picture

Ditto! Well said.

Mon, 06/07/2010 - 13:41 | 400011 Brett in Manhattan
Brett in Manhattan's picture

It just means those Scottrade commercials with the sleazy broker are working:

"No, I don't like the phrase 'mass exodus,' Gary."

Mon, 06/07/2010 - 13:48 | 400030 knukles
knukles's picture

Sign of the Times

When the layoffs start hitting Wall Street during the supposed Economic Recovery, it's a-gettin' time for all Mothers to Lock Up their Daughters and Small Animals, foreshadowing Illness, Famine, Poverty and Social Upheaval.

Mon, 06/07/2010 - 14:48 | 400166 Kali
Kali's picture

Unfortunately, yes.  The turds are hitting the fan, the main turd still coming.

Mon, 06/07/2010 - 13:48 | 400031 Gordon_Gekko
Gordon_Gekko's picture

Only non participation will KILL this rotten system; no amount of words ever will. Vote with your feet people. Say NO to the RIGGED US Stock Market.

Rot away and die Morgan Stanley. Good riddance.

Mon, 06/07/2010 - 13:57 | 400045 Mitchman
Mitchman's picture


Mon, 06/07/2010 - 13:58 | 400046 Mitchman
Mitchman's picture

Dup.  Apologies.

Mon, 06/07/2010 - 13:57 | 400048 Mitchman
Mitchman's picture

+1!  You can say that again.

Mon, 06/07/2010 - 14:16 | 400096 Duuude
Duuude's picture



Mon, 06/07/2010 - 14:45 | 400159 ozziindaus
ozziindaus's picture

Wasn't that the whole motivation behind the 401K scam? The US workers were marched into speculating on their retirements. Their earnings were replaced with gambling chips to recapitalise Wall Street's liquidity deficient casino program of the late 80's.

I believe this game may be over but will only reemerge/morph into something else more attractive to the blind sighted public once more. Those providing the solution are usually the ones who perpetrated the problem.

How many retirees were just recently sucked into becomeing RE speculators and wall street pros? They were just chips for the big fish to eat.

Mon, 06/07/2010 - 16:54 | 400408 Ripped Chunk
Ripped Chunk's picture

Fuck yes Gordo! Well said.

Car sales are picking up now so some of them will have a place to go.

Turd eating fuckballs


Mon, 06/07/2010 - 14:01 | 400060 Anecdotal Economist
Anecdotal Economist's picture

For more than a year now we have had the power to legally, and suitably, end too-big-too-fail among the banksters and the brokesters, simply by not doing business with them.

If we "starve the beasts" they will disappear, or at least become mere shadows of what they used to be.

I find it interesting, to say the least, that, obviously, a great portion of the American population simply doesn't give a shit - it might be "inconvenient" to have to change financial institutions.

Otherwise, it would be happening by now. Maybe we'll see a delayed reaction soon, as Financial Collapse 2.0 begins playing in theaters near you (check local listings), but clearly, as of June 2010, these bastards still are in business because we let them be in business.

If everyone moved their checking accounts and brokerage accounts to smaller, independent financial institutions, we'd see more Morgan Stanley branch closing headlines, and not 300 brances but 3,000, and we wouldn't have to worry whether a bought-and-paid-for Congress legislated the TBTFs out of existence.


Mon, 06/07/2010 - 14:39 | 400147 Sqworl
Sqworl's picture


Mon, 06/07/2010 - 14:58 | 400189 pan-the-ist
pan-the-ist's picture

My pension(as shitty as it is) is automagically invested by my company for me.

Mon, 06/07/2010 - 18:32 | 400604 Iam_Silverman
Iam_Silverman's picture

Thank goodness they care so much for your future. I bet that they have carefully selected the perfect retirement target date fund for your "safety".

They tried that crap with mine.  I moved everything to a stable value fund before the big drop, and haven't looked back since.  In the beginning they were matching my contribution with their company stock.  I withdrew all of my company match and put it in an FDIC insured IRA.  Not a perfect solution, but the safest I could come up with.  Now the company matches with cash since they have been taken private by KKR/TPG in oneof the largest deals on record.

Mon, 06/07/2010 - 15:05 | 400206 I_Rowboat
I_Rowboat's picture

Good Heavens!  Morgan Stanley is closing branch offices?  Their retail investment personnel will lose their jobs?

Standish - fetch me my smallest violin!

Mon, 06/07/2010 - 16:18 | 400330 Auric Goldfinger
Auric Goldfinger's picture

Got a flyer from a local rep for these dipshits crowing about giving me a guaranteed 1% return on a 8-month...something.  I was laughing so hard I didn't even finish reading it before it hit the round file.






Mon, 06/07/2010 - 16:58 | 400414 Dreamwalker420
Dreamwalker420's picture

With any luck, the building that prominently displays their logo next to the freeway will be reomoved soon!  I hate seeing their arrogant bloodletting business sit there in perpituity ...

Mon, 06/07/2010 - 18:09 | 400575 thegr8whorebabylon
thegr8whorebabylon's picture

I don't know shit but could it be that MS is preparing for the great unwind?

(derivitatively speaking)

Mon, 06/07/2010 - 20:38 | 400732 DosZap
DosZap's picture

Wonder how many of that 1200 are over 50?.

If they are, Welcome to WalMurt.....IF their lucky.

Tue, 06/08/2010 - 05:32 | 401139 russki standart
russki standart's picture

Unfortunately for the over 50 ex-morgan stanley types, Walmart will never hire them as policy prohibits hiring criminals.

Mon, 06/07/2010 - 20:45 | 400740 Kreditanstalt
Kreditanstalt's picture

Mutual funds leaking?  Could be that Mr. and Mrs. middle class have run out of spending money...

Tue, 06/08/2010 - 06:43 | 401166 StychoKiller
StychoKiller's picture

Sorry MS, but I don't have to be a financial genius to see that the numbers don't add up:

Banks letting people stay in their homes for free because they're too chicken to initiate foreclosure,

entire Countries going (or getting mighty close to) bankrupt,

unemployment going nowhere but up (at the best, sideways),

price of Gold rising faster than an F-22,

the US Govt, spending even our great-grandchildren's future into oblivion,


and I'm expected to care about YOUR financial problems?!

Don't go away mad, just go away!

Fri, 06/17/2011 - 20:17 | 1379165 sun
sun's picture

Dude, the Star Wars is cracking me up. Thanks for the great post, these are my fav so far. xbox 360 slim

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