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Will Mack Get The Knife?

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After Morgan Stanley (MS) fired Zoe Cruz last week, some are wondering how long before Morgan’s CEO John Mack gets ousted. CNBC’s Charlie Gasparino is hearing whispers.

I think Cruz's departure could land John Mack on the hot seat, says Gaparino. Not only did Mack hire and promote Zoe Cruz, but he gave her the marching orders to take on more proprietary trading risk. I think the odds of Mack resigning during the next year are 10-1.

Pete Najarian injects that there’s a difference between taking on risk -- and hedging that risk. I think Zoe Cruz’ head might have rolled because of her risk mis-management.

Also, there might be a stock play here, Gasparino suggests. Investors think financials are bottoming out, but if Morgan increases its write-down shares could tank once again. (Gasparino suggests the writedown could be as high as $6 billion – it was last stated at $3.7).

I expect to see additional writedowns with Lehman (LEH), as well, adds Karen Finerman.

Symbol
Price
 
Change
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MS
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Trader disclosure: On Dec. 3, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (ATVI), (DIS), (COH); Najarian Owns (ETFC); Najarian Owns (COP) Options,(HANS) Options, (TSL) Options; Finerman's Firm Owns (SKS), (TSO), (WMT), (CROX), (KSS); Finerman's Firm Owns (MSFT) Options; Finerman's Firm And Finerman Own (GS); Finerman's Firm Owns (AEO); Finerman's Firm Is Short (BIG), (LEN), (MBI), (SPY), (IYR), (IWM), (IJR); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Finerman's Firm Owns Russell 2000 Puts; Finerman's Firim Is Short (MDY) And Owns (MDY) Puts