Morgan Stanley’s $9 Billion Check

http://www.andrewrosssorkin.com/?p=355

by trs81 • 17 years ago

33 16 17 years ago

andrewrosssorkin.com

holograham• 17 years ago

Alternate Link:

http://www.businessinsider.com/the-9-billion-check-to-rescue...

aneesh• 17 years ago

> "The payment was supposed to be wired electronically, but because it needed to be made on an emergency basis on a holiday, Mitsubishi cut a physical check"

So, on a holiday, the electronic systems were "closed", but the paper check could be deposited normally? Irony abounds.

icefox• 17 years ago

Here is to hoping it might have been as simple as the person who would authorize electronic transfers was on holiday.

waterlesscloud• 17 years ago

But...

Paper checks don't actually move money around, computers changing numbers in electronic ledgers do. A paper check is just a device to trigger that process.

I'm not sure this story makes any sense to me.

dpifke• 17 years ago

The distinction is most probably legal. The transaction couldn't close until payment was received - and the paper check could be "received" but a wire transfer couldn't until the next day.

Likewise, they could put the funds on their balance sheet at the moment the check changed hands. I'm sure they also had accounts payable, so this allowed them to be solvent despite the fact that the check hadn't yet been deposited.

tybris• 17 years ago

What matters is that they had proof of funds, which they needed to avoid bankruptcy.

paloalto802• 17 years ago

The check wasn't meant to be deposited through traditional means. Checks like that give creditors some tangible evidence that the company will not collapse because of the imminent cash infusion.

mcantelon• 17 years ago

Interesting. Why was a Japanese bank willing to risk that much on a bank that made bad choices?

forensic3• 17 years ago

Japs are pretty heavily controlled by the American elite. There is actually a fairly big underground movement in Japan to throw them off and stop stuff like this from happening. Japanese banks and politicians though have been paying tribute to America for a long time.

euroclydon• 17 years ago

references needed

anamax• 17 years ago

Go for it - you'll be doing America a favor as well.

However, you may need a China plan. Or not.

akd• 17 years ago

They got 21% of the company.

paloalto802• 17 years ago

"Why was a Japanese bank willing to risk that much on a bank that made bad choices?"

Imagine buying an Xbox for $30. (It was a bargain.)

vdm• 17 years ago

Whatever you think about the rationale behind this check (I don't buy the story about electronic systems being down on a holiday either), I encourage you to read Rolling Stone's irreverent take[1] on Goldman Sach's role in this whole saga, as a valuable counterpoint to the fawning "all-nighter swinging dick" worship[2] as can be seen from the excerpt of this guy's book in Vanity Fair.

1. http://www.rollingstone.com/politics/story/29127316/the_grea... 2. http://www.vanityfair.com/business/features/2009/11/too-big-...

Morgan Stanley’s $9 Billion Check

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