There are changes at Morgan Stanely, parent company of Saxon Mortgage. Morgan Stanley Chief Executive John Mack is stepping down and will be replaced by retail brokerage head James Gorman, signaling the storied bank is embracing stable businesses after losing big on risky ones. Personally I think the move is made before Saxon Mortgage is exposed and sued.
Mack, will remain chairman of Morgan Stanley, which posted a second-quarter loss of $1.26 billion even as other banks posted profits. The change will take place January 1, 2010.
Gorman, in an interview with Reuters, rejected the notion that his appointment signals that the bank is taking a conservative turn. Gorman should look at the economy before making such a statement. Conservative might be good.
Which man will be required to explain why Saxon’s loan modification numbers don’t seem right remains unanswered at this time. My guess is neither will explain anything.