gorman. lead underwriter of the ipo out of facebook. our gary kaminsky with insight into why. >> hi, maria, hi, bill. there has been buzz since thursday with the increase in volume and obviously the subsequent move with the high before the close. earlier today ways able to present data put together by a gentlemen who joined us right after that interview, maria, on the "closing bell," elliott from hightower. and there was a very significant move higher into the last two market of trading. to put that in some sort of perspective, the day of the ipo traded 573 million shares. then a hundred million as the bar chart shows, significant jump off may 31st, the day we are discussing, until 111 million shares. >> what did the company say about this, gary? >> morgan stanley has given me a response, bill. i did say to them today, that if they don't believe there was any marking up going on, let me know. and here is their response. morgan stanley denies taking any action that pumped up the price of the s

gorman was pretty specific. he said it's coming. >> yeah, it's coming. it's going to be three, we're almost sure. this has been out there since february but after the jpmorgan disclosures, things really got hit and it looks like they are going to get the full degree of the three. >> what's the difference in terms of impact to the firm? three notches versus two notches? because he said as long as it's two notches, they are ready for it. but you're saying it's going to be three notches? >> we think it will be three. >> what's the difference in terms of the impact on morgan? i mean, the fear is that this is going to trigger a 5 to $9 billion collateral call for morgan stanley. what's the difference if it's 2 or 3? >> number one, more collateral. morgan stanley has a lot of collateral. the other two issues that are really out there are structured derivatives. some of the counterparties want to slow that down. number three is clients. that all said, i think it's important to recognize that these are earnings issues, not balance sheet issues for the company. >

at reached this part of gorman road they pplled ovvr and seat from the back with sarina 3 still strappede . a witness watched the whole thing. they tossed her out and left her here and rove awwa... that witness pulled then the carjackers a safe." pam's body still clinging to the side.... officer jody tookey was in the vicinity.... (cop)"people are just flagging me down theereejust screammng theyre ccying, theyre telling me what's going on a car is going down theeroad dragging a body.." (photo f fenceeand barbed wire)the ccrjackers drive faster... aad try to scrape pams body offfthe vehicle... (police investigator)"they intentionally drove across the roadway...and off the roadway and into the fence in an attempt to knock her body off of the car.." the trail of blood.. leads to the body... the scene. (cop)"she was right yellowwline... it was not.. ggoo ssape at all..nothing.. &p(voice only)"it was very disgusting..inhumane." rodney solomonnand bernard milllr... evidence at a car wash... but werr caught a few hours crime..rocked the country: - (pollce ooficerr "the fact that he stopped tte

that's what the road show does. >> my thanks to james gorman. >>> up next on "the wall street journal report," is housing heating up? what record-low mortgage rates fordable prices could mean for you. is it time to buy? >>> the fate of the local bookstore in an electronic age. one southern city's hometown girl means business. >>> > as we take a break, take look at how the stock market ended the week. uh, i'm in a timeout because apparently riding the dog like it's a small horse is frowned upon in this estatablishment! luckily though, ya know, i conceal this b boy underneath my blanket just si can get on e-trade. check my investment portfolio, research stocks... wait, why are you taking... oh, i see...solitary. just aan and his thoughts. and a smartphone... with an e-trade app. ♪ nobody knows... [ male announcer ] e-trade. investing unleashed. > after falling off a financial cliff, is the american housing market bouncing back? there's optimism when it comes to the value of the largest asset most americans hold mean opportunity for buyers sitting on the sideline? let's talk to stan hump

in just a few minutes, i'll have an exclusive interview with james gorman, chairman and ceo of morgan stanley, about that facebook ipo and how he sees it, what went wrong. >>> the markets had a miserable month of may. how is june shaping and up what does the jobs report mean for your money? joining me now is michelle gerard, she's senior economist at rbs. two pieces of key economic data this week. the jobs numbers on friday, the revised gdp report, weaker than expected. were you surprised by the numbers? are we entering another soft patch? >> well, i tell you, i was very surprised by the employment report. the magnitude of the weakness in that report was -- i don't want to say shocking. if not shocking, just shy of. really through and through, we saw hiring slow across most sectors. we saw the work week decline. even the people who were working worked fewer hours, they earned less money. it was a very soft report that suggests that all of the uncertainty that we're seeing globally is i think moving businesses to the hiring sidelines. >> so they're on the sidelines right now. does this

. >> let me get your take on what james gorman said from morgan stanley. did you call james gorman?> i've spoke tone a lot of ceos of listed firms and member firms and i'm not going to comment on individual conversations. >> let me get your take on what james gorman said in term of those opening hours. listen to this, ceo of morgan stanley. >> it was clear that the exchange handling the issue, nasdaq, was having problems. and those problems were being -- we were being updated every couple of minutes and delayed every few minutes and eventually they declared a go, everybody could go and we could start proceeding with the transaction. with that, over the next couple of hours, there was enormous confusion. that confusion and frankly in a deal of almost unprecedented size against the macro backdrop of everything going on in greece and so on created a potent elixir, if you will, that really set this thing aflame. >> do you agree with that? >> well, certainly we acknowledge between 11:11 and 11:30 we had trouble getting the cross to run. the cross ran, went to the tape, but the confirmati

. >> gorman road, howard county, the scene of a virtual horror show 20 years ago.ow a man left behind by it all speaks exclusively to the i- team. for 20 years, steve never spoke publicly about the brutal carjacking of his wife, pam. dragged to her death on gorman road, entangled in the seatbelt of her car, as she was trying to save her toddler daughter who was in the backseat. the little girl was thrown out of the car. pam's mutilated body left on the side of the road. how have you come to terms with the lack of humanity that was exhibited that day? >> yeah. that's really very, very hard. i don't know if i could ever come to terms. >> tonight, in his first interview with baltimore media, the widower is talking about the day 20 years ago that changed everything. i never thought you would do an interview. >> neither did i. >> coming up tonight at 11:00, more on this carjacking that defined this crime in maryland and changed laws across the country. and images of sabrina, the little girl left behing on the side of the ride, shared with the i-team. i am at deborah wei

" (cairns)"when the ssspects reached this part of gorman road they pulled over and stopped. they grabbedsarina still trapped insidee. a wiinnss watcheddthe whole thing. they tossed her out and left her here and drove away... that witness pulled over and kept sarina safe." then the carjackers continnud.... driving... with ppm's body still clinging to theesidee... officer jody tookey was in the vicinity.... ((op)"people are justtflaggingg theyre cryiig, theyre telling meewhat's going on a car is going down thh road draggingg barbed wire)the carjackers drive faster... and try to scrrpe pams body off the vehicle... (police investigator)"they &pintentionally drovv across th roadway...and off the roadway and into the fence in an of the car. " he trail of officer tookey the first on - yellow linee.. it was not.. gooddshape at all..nothing.. (voice only)"it was very &pdisgusting..inhumane." rodne solomon and berrard millerr.. triid to get rid of the evidenne at a car wash... but were caught a few hours later.the agnitude of the crime..rocked the country: (pollce officer) "the fact that he stoppe

morgan stanley's james gorman -- >> the industry will be down graded.he question is to what degree. what we have done and the kind of company we are now from a few years ago, it's very different. we've sold assets. we've done all of this long before moodys came along. >> and we are counting down to the jobs report. joe kinahan is standing by. finally action in the cme. hey j.j., joe. you can call me ray. big move in the vix the other day. what is the up side potential now for the vix? sky's the limit. i'm not saying we like volatility, but it does cause people to tune in. we could be on the cusp of something, no? >> you you guys like volatility, it help wills your ratings. traders like because it usually means more trading. the vix we've seen really heavy action in the 30 and 32 calls. which would equate to us obviously going lower. most of the folks down here believe that the futures are right around 1295, that they have to go down to 1287 to pill in a gap that we saw on the sunday night session two weeks ago which was the low for the month. obviously

james gorman yes a couple of points there social security is by definition a ponzi scheme i believe usa today ran a story saying yes social security is a ponzi scheme but it's a good ponzi scheme well not really all ponzi schemes and in tears social security is running out of money and it will also collapse just like syria gaze ponzi scheme and you mention the i.p.o. of facebook this is yet another version of a ponzi scheme called a pump and dump even the president of the united states was pumping shares while the insiders were dumping in the shameless a version of who wants to be a millionaire after once being a multimillionaire but there were many people telling the population it was a ponzi scheme don't buy it's going to zero but they still bought it because you can advertise openly now as a ponzi scheme because people i think. not only have they just given up on ever working again but they think that there's always somebody to write to the rescue these ponzi schemes collapse but ben bernanke he'll lower interest rates to negative something or somebody will bail us out and it will be

. >> i'm glad you brought up morgan stanley because we spoke with james gorman, and i asked him specificallybout this downgrade, and how he is anticipating -- what he is anticipating. he said it's most important to look at how big of a downgrade it will be. will it be two notches or three notches, listen to what he said about this downgrade coming. >> the fear out thereto is that you will see a two to three notch downgrade from moody's, and that will mean a $5 to $9 billion call. how much capital will you have to raise? >> we won't, we have the liquidity to cover the collater collateral, we expect a downgrade, we have liquidity, that's why we built the pool to take in all potential outcomes, it won't have an impact on our capital at all. >> do you agree with that? $5 billion to $9 billion capital call. >> i think it's more around that, i think it's more the question around things like otc derivatives and the questions that will come out of it. again, not anything representing the banks, but it raises the concerns and raises more questions, it's another overhang for the lack of a better way o

you saw morgan stanley's man at the top, james gorman's, interview with me. the debate next. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade. >>> welcome back. gold prices surging today as a stock and commodity markets get hammered. the main commodity index, the crb, is down better than 12%. take a look at oil, down better than 20% in four weeks. it's not scaring some folks who says the commodities could be setting up for a bear market richard bernstein doesn't see it that way. thank you very much, jeff. make your case. >> i don't want to buy commodities right now but soon. we're setting up for a really strong bull market, looking at some of these things, we saw the gold, fear trade coming back in

it's in there, and again the bank did not say as gorman said, i don't know if he would want to be caughtsking why you said that later, lying would be another word, he wouldn't lie about that if he didn't feel that the bank would be capable of meeting those collateral calls. >> we'll be watching awaiting this downgrade out of moody's. my next guest say the the real problem is the slow down and the economy. we have kevin karen with us, peter, let me start with you, you have been writing about this quite a bit, and i guess the global economy is slowing and that will impact earnings. >> that's right, we had a weakness in chinese preliminary index that fell to a seven month low. we saw weakness the euro zone, and we saw weakness in the philadelphia fed survey. and that is intensifying and central bankers are trying to fight but it's moving faster than they can. >> and do you think there is any -- i mean people say so what, china is still growing at 7% or %. brazil at 5%. better than the u.s., do you put credence in that? >> no, the global slow down is intensifying. earnings are going to disap

one that was compounded by morgan stanley's james gorman who had an interview basically said shame on you, the buyers, for thinking you can make a quick buck. take a look. >> the group of people who thought they were buying the stock so they could get an enormous pop were both naive and bordered under the wrong pretenses. >> now, bozos. talk about caveat emptor. shame on morgan stanley for saying that. everyone in the business knows the game. here's the way it works. everyone is supposed to win on an ipo, especially a big popular deal where it would have been easy to let everyone win and facebook was the antetheosis of that kind of deal. i had also gone too far to pull back at the last minute. when it knew it had no control of the opening, whatsoever, and the systems were too backward to hit on the influx, amazing when you consider how they paraded around telling us how well it will go. maybe they will show a little remorse when they speak tomorrow about compensating brokers for losses on the deal. you got to own up, everybody. people own up when they do mistakes. the essence of what

bell today, morgan stanley seems to be the one sticking out more than most and with maria it was jim gormang prepared for a two-notch down grade and some think it could be worse than that, maybe a three notch. how do you prepare? what's your trade? >> i think if you look at morgan stanley, a three notch would be negative. most of this has already been priced into the market. we have known for a long time. it has been telegraphed. morgan stanley is the bellwether. i think two notch would be positive for the banks and some of the regionals and i think it is really the way to play it right now. >> down grades and the potential down grades play a role. >> no. as b.k. said, it is rumored for a while and you have to look at the evaluations and some of them are very cheap and very attractive. j.p. morgan is one we own and had buying earlier this week for the trust and particularly when it trades below 10 value because it is too cheap for a company of this kind of caliber and to cade's point, it is surprising that they have actually reacted to the trade a little quicker than expected, but then you

naval forces in south pacific, vice admiral robert gorman was found wanting, for a number of recent the he had been brought in to lead the charge in the south pacific, having been stationed at london. he was a special naval observer as the blitz was going on reporting directly to president roosevelt. so using natural choice to serve as commander of so back. but as the campaign began unfolding, it became clear he wasn't the kind of leader that exactly fired after to be like to complain about the in my development of a panic or. a premier strategist, marvelous diplomat and a planner. but when the fighting started, he found himself just obsessed with detail and he had never left his headquarters. he never went forward to see the marines in guadalcanal. never saw his forward naval base where the cruisers and destroyers were we fueling. he was very aloof from the fighting front. and it quickly became clear that he was in a very tough position. they concluded that admiral gormley was having a nervous breakdown in command of this crucial operation. they were old friends for years, very close f

even as a reporter who covered this story 20 years ago, every time i see gorman road, i think of pamhere she was found. >> it was terrible. they just left her. >> 20 years ago, as a howard county police officer, she was first on the scene. >> anybody that worked the case will never be able to forget that day. it was tra matic and horrific. >> the brutal death of dr. basu is the subject of this new book, fatal destiny, written by jody's husband, also a veteran of the howard county police department. >> this is not a book or story that can be sugar coated. there is no way to sugar coat the brutality of this. it is truly one of the ugliest crimes ever. >> one of the most beautiful things that developed over the years was serena basu who is about to graduate from college. >> she is always smiling, she is happy. >> while steve did not want us to interview serena, he did share personal photos from over the years. >> how did you feel that night? >> not good. >> steve says serena, who wants to be a structural engineer, has a drive and discipline that mirrors her mother. >> i mean, serena hel

guys are way off the reservation, so it was very clear, it was like a 36-hour period where i think gorman and grimes recognized i know there will be over the tra transom order, but the way that nasdaq screwed it up, it was difficult for the flip to occur. there was a flip to be had, but you couldn't flip it. >> and that will come back time and again and simply say we'll never really know how it would have gone had it not been for the major screwups, and that perhaps stability has been found. so a very good pieces, tau you about how there's a diminishing return, go back to that quote, it's his throat to be choked. odd that in this would ever put themselves out in that way. this is a guy that's a successful investment banker. it wasn't really him. i think when i real that article, i think it was the cfo from fable fable who got greedy. >> i've heard different things on that that may be -- on how hard morgan may have pushed, that we can get this done at this price. >> it's a fascinating stories, but at the end of the day it doesn't really make a difference, does it? is the stock really worth

you see james gorman and others from morgan stanley come out ahead of these ratings. >> well again ait's putting a mirror up and saying hey here is the information and criteria we're looking at, here are all the issues and you can argue whether you like it or don't like it or whatever, but it is a mirror and it puts a position forward and so look, i mean, whether it's ourselves, with standard & poor's or moody's or whatever it's a reflection of what's going on in a particular industry, a market, a company, a security, and that's a good thing. now unfortunately you may not like the information that you're getting but to an investor, an investor can't have all of this spin. they've got to have real information, substantive information and they can make a decision on what they want to do, but from a ratings standpoint you're putting out on opinion. >> okay, terry, thanks for that. >> great. terry we appreciate your time this morning. have fun down there. be careful. good place to meet. >> we got to hope -- this is an opportunity and as the g-20 gets older and the process matures, we've

but the people she interviews, gorman talked about how naive the people were, and greifeld gives some technical mum mumbo jumbo. but what i come back to, the people are saying, you are spiteful, hateful. when maria brings up these issues and they don't set full in on swords, i say, shame on you. i say, shame on you. >> fall on your sword means what? >> we really blew this. this is it the lawyers in the room who are saying -- you know, sometimes -- in sports, which i find to be far more accountable, you will find someone who says, i really blew it, i had the wrong pitcher in. why are sports guys more accountable than these guys? if we can have that taken back, if we hadn't said that we were going to open at 11:00, if we had not tested -- we tested incorrectly. why not just say, wow, you know, sorry. we really blew it. we let america down. because they let america down. >> how about the argument from the place where we are right here, nasdaq's plan would subsidize their acquisition to market share, right? >> yes. i think duncan has a right to crow. t.j. is going to be on later today. it

we know that gorman came on air later that afternoon and talked many times about a longer term perspectivehad had the best day since trading public in terms of percentage gauge from low to high. if you. this is pretty good evidence. they did, you draw your own conclusions in terms of what does it mean. it is just another thing that creates this image that facebook was just a bad thing for retail confidence. >> okay. let's wait a minute here. you have schooled us. >> there has been so many things going back to that ormgal pricing that i still can't figure out. here is the point. if they did not do this, why have they not disclosed yet how much stock they bought in terms from the day that deal with us priced? i just don't know. i wonder why did it spike up. >> if i'm wrong and i drawing false conclusions, please shout out and tell me so. >> i would imagine that you think that the short interest was significant enough to spark a short rally? >> traders tell me there was a big print that went up after the 145 change of volume. there was a big print that went up and cells stepped away thinking