UBS's Glenn Schorr is the first one I have seen to directly address the cause of the selloff, the increasing cost of credit default swaps to guarantee the company's debt: "we find it disconcerting that the illiquid CDS market (or the rating agencies) can have so much influence on the fate of these companies and alter the landscape of the brokerage industry."
Hear, hear. He notes both Morgan and Goldman have strong capital and liquidity positions, have reduced bad asset exposures, and have prefunded their issuing needs for the next 6 months, but does not say the obvious: the company itself has done all it can to address the fundamental issues in its earnings report.
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