http://online.wsj.com/article/SB124053759917451185.html Excessive regulation ? Why be subject to it ?
Can you paste some of the content? I don't want to subscribe. That said, if they are spinning off PDT, that is a big deal. A really big deal.
Morgan Stanley , which posted a wider-than-expected first-quarter loss this week, is eyeing changes to its biggest proprietary-trading desk, the Wall Street Journal said, citing people familiar with the discussions. The changes include a spinoff of the unit into a hedge fund or opening up the unit to outside investors, the people told the paper. Morgan Stanley may still decide to leave the trading operation, called Process Driven Trading, as it is, the people told the paper. Since its 1993 launch, the unit has earned the New York company $6.5 billion in pretax income, the paper said, citing a person familiar with the results. A Morgan Stanley spokesman told the paper that "no decisions have been made on PDT." Reuters efforts to contact Morgan Stanley out of regular U.S. office hours were unsuccessful, while a spokeswoman from the company's office in Hong Kong was not immediately available to comment. Morgan Stanley, on Wednesday, posted its third loss in six quarters and slashed its dividend as real estate investment losses and a debt-related charge wiped out strong trading and banking fees.
PDT is super secretive, and supposedly they were one of the best prop operations around. I can't imagine they wanted to stay inside Morgan on their own -- it's as much a function of them wanting out as it is Morgan trying to make a buck by spinning them off. Has to be traders pissed off with the fact that their bonuses got wacked in the face of firm-wide failure. They either spin these guys off and still manage to get a cut, or they'll see them all leave, raise capital, and start elsewhere.
This situation is very telling .... ................................................... Just imagine the different and accurate types of "inside trading" information that MS is privy to.... This is the game....better info. than anybody else.... And a monetary means to utilize it.... .................................................. Thus GS, MS, and others.... ................................................... And legal at that....albeit on the fringes.... .................................................. I would think that such an operation should be domiciled in a country with the most legal ease....and no tax burden.... ................................................... In fact....the exchanges themselves should adapt a BATS type model.... And move to the country with the least tax and legal impositions.... .................................................... Why not ?
You should probably know that most of these secretive prop desks simply do order flow scalping and insider trading. They will do more advanced strategies, particularly global macro, but the base of their operations is working off order flow & insider trading. Whenever a request of looking into these operations arises by some regulator or politician, it is quickly squashed.