Alice in Morgan Land

Just about every single time a current or former employee of a company alludes to its stock price being "too low" I hit the mute button. With so much personal interest involved it is very hard to tell when people are giving an honest valuation of their home town team. This was especially the case two/three years back in regards to many investment banks.

That's why I found this op-ed piece by ex-Morgan MD Alice Schroeder a good read. In it, Schroeder doesn't advocate for buying up Morgan stock by stating it is undervalued. She is simply explaining why it is too cheap for her to sell.

I find the piece interesting for two reasons, amongst others.

1) Morgan has somehow managed to stay out of the fray over the past couple of years. That is to say they haven't been mentioned much in the daily "why bankers are evil" rhetoric.

2) An economic historian I know likens them to the old Ottoman Empire at the turn of the 20th century (calling them "The Sick Man of Wall Street"). In other words, a rotting house waiting for a strong stream of wind to blow it down.

These two issues make it the perfect candidate for...standing still with hands firmly sunk in pockets doing nothing to change operations and culture. I think this is the author's motivation in this article. Wake up time. It is here. Though it seems like just another few words I think it may have a positive effect or at least could.

I like Schroeder's analysis as it touches on a huge issue in modern investment banking, which seems to be avoided by everyone. "How do we do a better job". I expect the government to be incompetent and brush dirt under the carpet. So I am not surprised by anything coming out of D.C. I do, however, have a higher standard set in my mind for The Street. Stanley's (now decade or so long) malaise is a prime example of the responsibility avoidance I am referring to.

The "why can't we be more like Goldman?" mantra is reflective of the laziness and vanity that had as much to do with the crisis as any Abacus or AIG. On Wall Street, on Main Street and in D.C..."why can't I" has replaced "what can I do".

The proactive stance taken by Shroeder is one I second. It reminded me of this oldie but goodie. I suggest scrolling down to the large font letter A and reading the next paragraph...

As the world and the game changes...will the old legends adapt? Or will they be blown back against the Bosphorus?