that's why the whole thing with gorman is very interesting. gorman is a brokerage expert. this is going to be a firm whose business model is around advice. >> nice job, charlie. i can't wait to read that book. it an autographed copy, i promise i'll go to the store and buy it. >> if you guys could just do this the whole show. >> thanks very much, charlie. have a good night. and "cnbc reports squts just getting started. we have much more on john mack's departure from the top job. mary thompson speaking to mack and his replacement. a story you're only going to here on "cnbc reports" live just ahead. the market getting close to 10,000. are we back? yeah, we are. we are first in business in the entire universe. >>> if i were a bear right about now, i would be thinking about hibernating. back on july 2 on my show, john made a startling prediction. >> 4,200 by 2011. we said we would break the lows by october of this year. it's just not going to get better. >> all right, since that show, the dow is up more than 6%. it's going to have to drop 3,000 points in the next six weeks for

gorman and mr. mack briefly. the 51-year-old goreman telling cnbc that it's a table one, something that's been a bit of a rarity among wall street firms recently. but don't look for any major changes once he takes the reigns. he has been intimately involved with strategic decisions at morgan. currently been he's copresident of the firm and chairman of that brokerage at jb. and his job will be to make sure that the integration of that joint venture stay owes track. his second challenge will be to make sure that the company's sales and trading operations are on firm footing. oofr a seven-year still at merrill lynch where gorman is credited with improving profits, critics say if there is a chink in his armor, core man conceded those points last night when pointing out he does spend a lot of his day working on the institutional side of the business. mack, who returned to join morgan stanley in 2005 after two years earlier, said the board looks at six or eight candidates but ultimately decided to stay with someone on

they told cnbc gorman is a steady hand at morgan, after strategy and management changes. >> james gorman, i think is a very capable executive. i think james gorman has proven that, number one, he knows how to establish a strategy, he knows how to execute that strategy, he's had success wherever he's been. >> if there is a king in his armor it's the fact that gorman doesn't have any experience in trading and investment banking. and while gorman concedes that, he does say he spends a great deal of his day working on the institutional side of morgan's businesses. mack will stay on as chairman. he told cnbc he describes his tenure as ceo as being up and down. while he says he feels great about this work he did during the credit crisis, notably securing a $9 billion investment from japan's mitsubishi last september, critics say ill timed decisions like ramping up risk in proprietary trading and expanding exposure to mortgages on the eve of credit crisis are blemishes on mack's career. you want to stay tuned on cnbc because mr. mack will be our guest on "power lunch" at 1:00 eastern time today

that's where gorman's expert says is. we've talked about this joint venture that was done in the heat of the crisis with citigroup, contributing smith barney to this new behemoth. morgan stanley ultimately under the terms of that deal will likely control all of that and become the biggest brokerage firm, surpassing that of merrill lynch in the process. right now it's the largest such entity, but they own 51%. so it would be an extraordinarily important component of this firm there's no doubt 'll be throwing a lot of the stuff through the retail system. the question is whether they'll still be doing a lot of the trading that seems to take so much of the profitability at this point of so many firms. still so many questions about the ultimate model. >> he's a retail guy, and you can make pretty good money there if you control your risk properly. what do you hear about that? >> you hear mary mention the brief conversation she had with gorman, every other comment i've seen as well. it's not like the investment bankers there st

gorman as the new head, again, this is not new news. think that you kind of move on with this one. i don't think this is affecting the stock. i don't think it affected it today and i don't think if you're going to is a substantial change in their strategy. this lack of risktaking a think shareholders ultimately is a great thing. >> the only problem is the wealth management franchise, clearly is what they're focusing on if we're to take gorman's appointment is a real challenging space because do you have companies like schwab and independents really challenging that franchise. >> this is expected. you look at it, why did they have gorman already in this position as the co-president? he was appointed, by who? john mack. they've been moving in this direction since january. you can see this coming at some point down the line. absolutely, when you look at john mack, he also had his contract begin to expire next year. there was a lot of things going and this is not a new risktaker. >> right. >> this guy's not coming in because of the fact tha

certainly the appointment of gorman as the new head. this is not new news. i think you kind of move on with this one. i don't think this is affecting the stock. i don't think it affected it today, and i don't think you're going see a substantial change in this strategy, but if anything, this lack of risk taking, i think, for shareholders ultimate will you will be a very good thing, because it's a great business model. >> only problem with that is that the wealth management franchise, which is what they're focussing on if we're to take his appointment, is a really challenging space because you do have companies like schwab and independents really challenging that franchise. that's an area where you are mayben the same level of margin. >> if you look at it, why did they have gorman already as co-president. he was appointed by who? john mack. they've been moving in this direction since january. you could see this coming at many point down the line. absolutely when you look at john mack, he also had his contract going to expire next year. there was a lot of thin

james gorman, the co-president, will assume the ceo spot. what does this mean for your investment in morgan stanley? let's bring in brad hints, former ceo, morgan stanley treasurer currently a top-ranked analyst at sanford bernstein. brad, pleasure to have you with us. reading through your research notes you make some good points. first of all that james gorman has no operational experience in investment banking and sales or trading which is more than 50% of the business. why should we give him the benefit of the doubt at this point when we've got other stocks making some nice runs like goldman sachs which hit a 52-week high today? >> you've hit on a very good point, which is, you know, morgan stanley, we've seen on the trading side has been underperforming. so what is -- what are we seeing in the marketplace today? trading is doing very well. fixed income's doing well. we're seeing it in the united states. we're seeing it in europe. and morgan stanley seems to be taking the action to improve their trading business. so -- but i don't see tha

he'll be replaced by gorman.l mack will remain as chairman. >> we should point out it was expected that mack would step down next year. as he approaches the end of his contract. and his retirement. and it was also expected that gorman would take his place. not necessarily an upset that we learn this now. but possibly an orderly succession plan here? >> that's right. it certainly gives investors times, and as you said an orderly succession plan in place. it has certainly been suggested that mr. gorman would take his place as ceo. >> morgan stanley shares up about .25%. off of the higher levels, before this news, we've got $28.63 a share on morgan. we've got the closing countdown right after this short break coming next. >> after the bell, moody's on u.s. banks. we'll get an inside look at the health of the banking system from the ceo of bank united, ahead at 4:00 p.m. eastern. you're watching cnbc, first in business worldwide. could someone toss me an eleven sixteenths wrench over here? here you go. eleven sixteen

gorman and wally chama. >> wally chama is staying.lso a positive point to make. >> that's very positive. this is an orderly place. but there is a degree of tension, i believe, over john and the board over this issue of missing the second quarter earnings. i think it would have been done next year if it wasn't for that. >> it certainly was understood and expected that he was going to step down when he hit 65, which is this november. we should point out that apparently he's going to stay on with the chairman role for between two and three years, which is also worth noting. he's still at morgan at chairman in 2010. and by the way, gorman has a terrific resume. i know you'll agree. having turned around merrill lynch, putting together the huge morgan stanley smith barney network. >> i remember what this means. because gorman, he was never a broker, but he ran brokerage divisions at merrill lynch, over here. this shows you how much they're going in that direction of advice, giving advice to the individuals. and yes, you're right, these guys

route 1 between free state and gorman road, the water main break blocks the roads as you make your way 32 interchange. as we look at the jfx, traffic is looking good. now let's get a live update with linda so. linda? >> reporter: police officers and firefighters are being asked to stay home from work so the city can save money. i'm linda so, live at city hall. details up next. this is more tn look. i made it say, "boog." ...i-can-get-him-a- math-tutor" button. (announcer) if others run out, we still have what you need for school. staples. that was easy. look. i ma it say, "boog." ...i-can-get-him-a- math-tutor" button. (announcer) if others run out, we still have what you need for school. staples. that was easy. denise! you've lost weight! it's just all these giant things make me look small. (chuckle) i hate dieting. me too. that's why i eat this fiber one yogurt. (mr. mehta) it has five grams of fiber, zero fat, and fifty calories. please, this is too creamy and delicious. it's true, only fifty calories. i am adding this to my list. here it is. (announcer) go to fiberoneyogurt.com for

who will replace jim gorman? that's a big question for a lot of wall streeters. 20,000 brokers, this guy has been around for a while. who is going to replace him? >> he's the chairman of the morgan stanley/smith barney venture. charlie johnson runs it, he will continue to run it reporting to james. >> what's next for you? is this retirement? they're talking about raising the retirement age so that way social security kicks in later. you're only 65. >> can you wait for social securi security? >> well, i feel a lot younger than 65. i guess maybe i feel 55. i'm not sure. i'm not going to retire. i have said to the board, i have said to james, i have said to our employees at morgan stanley, i'm here as chairman. i love clients. i love doing deals. i have talked to four or five ceos this morning. i have talked to steve schwarzman and called henry to talk to them about ways i can work with them. i travel all the time. so i look at being the chairman as helping james when he needs me. dealing with clients and talking wi

the investment bankinfirm on january 1, mack will hand overhe reins to the rrent co-president james gorman. since 2005, unr mack's leadership, shes of morgan stanley have fallen abou34%. but shares at rival goldma sachs, have surg about 70%. paul: stocks got off to a slow start on wall streetoday, but ded with another positive close, it's 5th straht session to thepside. an upbeat forecast from xas instruments mbined with prter & gamble's prediction for improved sales to ost stocks. adding to the bullhness, a better tn expected drop in new weekly jobless benefit cims. the upward tnd continued through the afteoon and strong dend for an auction of 30 year t-bonds lped the market end at the day's highs. susie: president obama was talking up t need for healthcare refm today a day afr his blunt address to congress. speaking tan audience of nurses t president said the number of uninsureamericans rose by 6 million in t past year because of the ression bringing the tal to 46.3 millio did thpresident's speech to the nation make difference in thhealth care debate? i lked with university of miami heal

the investme bankg firm on january 1, mack will hand ov the reins to the current co-president james gorman. since 2005, der mack's leadership, ares of morgan stanley have fallen abt 34%. but shares at rival goldn sachs, have sued about 70%. >> paul: stocks got off to a slow start on wall strt today, buended with another positive close, it's 5th stight session to t upside. an upbeat forecast frotexas instrumentcombined with octer & mble's prediction for improved sales tboost stocks. adding to the buishness, a betterhan expected drop in new weekly jobless benefitlaims. the upwardrend continued through the afrnoon and strong mand for an auction of 30 ye t-bondhelped the market end at the day's highs. >> susie: president obama wa talking uphe need for healthcare rorm today a day ter his blunt address to congress. speakingo an audience of nurseshe president said the number of uninsud americans rose by 6 million inhe past year because of the cession bringing theotal to 46.3 milln. did e president's speech to the nation maka difference in e health care debate? talked with university of miami heal

investment banking firm on january 1, mack will hand over the reins to the current co-president james gorman. since 2005, under mack's leadership, shares of morgan stanley have fallen about 34%. but shares at rival goldman sachs, have surged about 70%. >> paul: stocks got off to a slow start on wall street today, but ended with another positive close, it's 5th straight session to the upside. an upbeat forecast from texas instruments combined with procter & gamble's prediction for improved sales to boost stocks. adding to the bullishness, a better than expected drop in new weekly jobless benefit claims. the upward trend continued through the afternoon and strong demand for an auction of 30 year t-bonds helped the market end at the day's highs. >> susie: president obama was talking up the need for healthcare reform today a day after his blunt address to congress. speaking to an audience of nurses the president said the number of uninsured americans rose by 6 million in the past year because of the recession bringing the total to 46.3 million. did the president's speech to the nation make a dif

john mack stepping down as the ceo, replaced by james gorman. of course, campbell's soup beat estimates on improved gross margins. guidance ahead of expectations. technology, on the earnings front as well, semi, the results also top expectations. have a great weekend. >> thanks, scott. thaf have a great weekend. >>> the other business headlines we're following tonight. consumer index to 70.2. better than economists' expectations. they were looking for the highest level. it actually hit the highest level since june because of the optimism that the economy was improving. and they were expecting a lot worse. the commerce department said wholesale inventories fell 1.4% in july. now to the lowest level in nearly three years. the 11th consecutive monthly declines. whole sales rising 0.5% since june of 2008. the labor department is reporting that u.s. import prices were up 2% last month due to a spike in oil. double what wall street was looking for. when you strip out oil, actually, import prizes rose. a small decline in july. we break down the day's m

now at the helm, heir apparent james gorman.le some approved, other wall street watchers aren't sold. >> the one concern i have with him, and i don't think this is a new concern, is he really does lack experience on kind of the institutional side of the business. the non-retail trading of some of the investment banking and kind of that side of it. >> can morgan stanley's new captain turn this ship around, or is this street survivor still adrift at sea? it is interesting to note that in today's session morgan stanley had a new 52-week high, but you our viewers when we asked you to vote on our favorite street survivor stock only 2% of you, 1.79% to be exact, took morgan stanley. at the bottom of the heap. what is the feeling -- >> i think the street has been very critical of morgan stanley. you have to understand something. in terms of the mortgage security market, morgan stanley was way overexposed relative to goldman sachs. so you really can't make the comparison there. however, you can respect morgan stanley for being able to s

he will be replaced by one of the bank's co-presidents, james gorman. that's it from cnbc.e are first in business worldwide. now back to "hardball." >>> welcome back to "hardball." pressure is mounting for south carolina governor mark sanford to resign. the state speaker of the house and 61 house republicans called on the embattled governor to step down in separate letters sent to his office this week. and here's how governor sanford responded today -- >> i would say there's amazing disconnect between where working people are in south carolina and the degree to which they would like to move on and are attempting to move on and where at times the political world is, for different reasons, and we saw those two actions this week, people believe it to be in their best interest to raise this and to elevate it, and with all due respect to some in your field of work, even some of the media thinki ining it's an interestin store dwla will keep alive and keep nudging along. >> can he survive the growing calls for his resignation? joe connor has been covering the story for his state n

this happens as morgan stanley gets a brand new ce,o james gorman. he has been serving as the head of the firm's brokerage arm and is credited with getting morgan stanley back on track. eight years ago, terrorists touched off a full-fledged war with the u.s.s. the wound that they cut into downtown new york remains open today. president bush promised an anxious nation that he would take the fight to al qaeda >> i can hear you. the rest of the world hears you. the people who knock these buildings down will hear all of us soon. [applause] [chanting] martha: that was an incredibly emotional moment. that was firefighter bob beckwith. we mentioned the commissioner of the fire department here in new york. jennifer griffin is standing by at pentagon. did the military ever expect to be fighting two wars with regard to this attack eight years later? >> i think they did not expect to be in afghanistan eight years later in the situation that they find themselves in. and there was a time when war critics described afghanistan as the good war and iraq as the bad w

gorman. >> final question for this round. according to what we have been told, in march of this year, that the guards at capsule and confronted you directly and complained of our card shortages at camp sullivan and said that these card shortages endangered the embassy. did that happen? >> no. >> for the record under oath and you are denying that happened? >> it did not happen. we had a town hall meeting. there were discussions that did not happen in that manner. >> what happened at that town hall meeting? >> my recollection is, commissioner, we had a discussion concerning individual person shift our and our. it was a question concerning could we go to 8 hour shifts for each current 12 hour shifts. the point i made we are currently under a 12 hour shift schedule. and we are currently under shift r and r. and all that needs to be reviewed. >> why are you under a 12 hour shift. are there to fugard's? >> no. it was actually the number one reason that you do that in this particular environment is shift change. if you increase the