i don't i haven't dug too much into morgan stanley but i do know that it's the fear of the stock it's really been getting hammered this week and it stepping beyond you know stepping back from morgan stanley it's hard to imagine a situation which if you had failures of the big french banks being people. says it's a general the rest of them it's hard to imagine the u.s. financial system not really getting hurt by that i mean and spread this were can teach and it is one comes up all the banks are connected on the back and now gordon brown former prime minister of u.k. referred to formally in the record of the shadow banking system there's widespread understanding that there is this dark the dark pools the shadow banking system multi-trillion dollar kind of back channels connecting all these banks are a lot of this debt is off balance sheet so to speak and the idea is that bernanke is trying to shovel cast in the front door and all the back room the off balance sheet accounts are blowing up and you can't seem to match the two is that a fair characterization i mean i think the easiest way

banks survive a french banking collapse or the cross-currents there i would say all the morgan stanley is too big to fail in the sense that if it were to have a failure like lehman and i don't think it's going to our be surprised if it did. it would certainly have huge ramifications on the financial system you know there is this talk that it's exposed to french banks that might be overblown in the sense that you know all kinds of banks have huge notional exposures to various things where the fact when you look at hedges and how what the actual risk is it's a lot less. i don't i haven't done too much in the morgan stanley but i do know that it's the fear of the stock it's really been getting hammered this week and stepping beyond you know stepping back from morgan stanley it's hard to imagine a situation which if you had failures of the big french banks b.n.p. par so as a general the rest of them it's hard to imagine the u.s. financial system not really getting hurt by that i mean and right this worked in teachin is what comes up all the banks are connected on the back and now gordon br

. >> and as the head of security for morgan stanley, predicted the terrorists flying a plane into the world trade center, then because he had anticipatessed and prepared he led all of morgan stanley's 2700 employees out of the south tower to safety. >> how do you portray someone who was larger than life? everything he did in his life were tremendous. >> there are so many parts of his person i admire and in some ways identify. i think he had a very is that right intuition, i think he was a very intelligent, disciplined man. >> reporter: and, after all 2700 were out, he went in for one last check. less than an hour after being hit tower two collapsed in a hill of dust and debris. he never came out. rick's widow, susan, watched the dress rehearsal of "heart of a soldier." >> i think the most incredible thing was my husbandly loved to sing and, you know, he not only sang in vietnam to calm his troops but he, you know, obviously was sing to go the people coming out of -- from down the steps of 9/11, he sang in the house that morning. >> reporter: so many people have had to pick up and move

he'll step down as chairman of morgan stanley at the end of the year. mack did two stints at morgan stanley, leaving in 2001 after a dispute with then chairman phil purcell, returning as c.e.o. in 2006 and becoming chairman early last year. his departure means current c.e.o. james gorman will add the chairman's role to his duties. and tom, here at the new york stock exchange it was a happy day. i mean four days in a row with days up, they are actually calling it a winning streak. >> tom: certainly is it's been quite a week here. september is not living up to the reputation as a rally killer, certainly not yet at least. but still a few sessions to go. let's go ahead and take a look at tonight's market focus. u.s. stocks were encouraged by the news out of europe we mentioned at the top of the program to finish with gains for the fourth straight session, but a bellwether tech stock, the maker of the blackberry mobile device, research in motion, turned in a much-worse-than- expected quarter. the company earned 80 cents per share, eight cents less than estim

expects the ruble to slide even further well joining me now is jacob now our chief economist at morgan stanley russia thank you so much for joining us now to some us what are the prospects for the ruble now well actually i think they're pretty good at current oil prices if you look at what's happening to reserves which is the kind of results of the entire set of. transactions between russia and the rest of the world every week we've been seeing an increase in international reserves and if you think about oil exports at these prices and what's happened if we take sports i think you'll find that the current continues to be very strong in russia on the capital it's a little bit less predictable but i think with the uncertainty around the elections the may have been an increase in care what is the not to the level that we saw earlier this year so actually we expect the ruble to strengthen again from current levels going forward well you mentioned uncertainty over the election but control of the budget is quite balanced and russia's economy is still growing why is it perceived as such a high risk b

volatile season so yeah i think we should be worried about goldman sachs we should be worried about morgan stanley that was the one i was thinking of and j.p. morgan chase who in two thousand and eight two thousand and nine at the height of the financial crisis we say their balance sheets was solid while the federal reserve is pumping hundreds of trillions of hundreds of billions of dollars worth a load sensitive but on the flip side jerrold i mean we hear companies like morgan stanley like goldman sachs and nobody can forget i think shortly after being bailed out you know under tarp goldman sachs is handing out here you just going to says his executives its employees and you know just last week earlier this week goldman sachs won a dismissal of the case and some of the people brought against it for doing that i mean what do you think that says it's hard to not feel that this company is not crying wolf. oh yeah and you know. the dismissal of the case i'm going to the systems ring it's just this we're only just office that's how they got the name these people's heads go roll so that's all different

and other banks so it's true you said about morgan stanley and their quarterly report and the stock is down today i think was about six percent but does it go down if a big french bank goes down if they have counterparty exposure to the point that it's going to affect their leverage ratio then yes absolutely. but again the thing with these banks and the thing with with counterparty risk and leverage ratios is that there is so much exposure and there's so much hedging that goes on in the river this market that's supposed to protect these banks from possible devaluations or be leveraging that no one really knows no one's fully confident so when a bank run ensues leverage is the is the pancake effect so watch out. economic blogger n r t contributor now as we just saw the rich are getting richer and america but the poor and everyone else are struggling a record proportion of the population are on food stamps one in seven and my next guest rapped about it take a look. and see. i'm . just going right. just right and now in our new york studio is that the hip hop artist himself mr e.v.t. and

of play on like bank of america let's say in the us in other banks so it's true you said about morgan stanley if you come up in their quarterly report and the stock is down today if it was about six percent but does it go down if if it's a big french bank goes down if they have counterparty exposure to the point that it's going to affect their leverage ratio then yes absolutely but again the thing with these banks and the thing with with counterparty risk and leverage ratios is that there is so much exposure and there's so much hedging that goes on over the river this market that's supposed to protect these banks from possible these valuations or be leveraging that no one really knows no one's fully confident so when a bank run ensues leverage is the is the pancake effect it's and that sounds like a lot of confusing things i think the takeaway is to be concerned because whenever it sounds that confusing it's never good at least if history starts that is to take a fantasy economic blogger an arcane contributor now as the economy continues to suffer and things are not getting much brighter on t

the debt so the leverage in the european banking system is what's concerning people as far as morgan stanley is concerned and as far as u.s. banks are concerned there are protests around the hook through c.d.'s or other exposure there is a concern because the amount of leverage in europe the amount of leverage in the united states is still high enough that there's so much debt in the system that hasn't been liquidated that if there is to be some sort of crisis in europe it could feed into the u.s. at the same time that could also cause capital flight from european banks in the u.s. banks that are deemed to be safe but the takeaway is during a banking crisis what happens is that the institutions that are deemed to be the most safe see capital flight come forward that they become much stronger and the rest of the economy begins to collapse and something the nation so great that down in english who wins or loses well it's not clear who wins and who loses but you have when you have a banking system that's over leveraged it potentially can cause a pancake effect which would what is that mean what

morgan stanley is a little bit shy, i don't think she wanted to ring that bell, morgan stanley said appleback some money to share holders either with a buy back or with dividends. we will have more business news coming up. >>> thank you for joining us on the morning news, use it september 13th, i am dave clark. >> time now 6:30. >>> well in news, a big announcement two uc berkeley graduates still held in iran may be coming home soon. allie rasmus is in berkeley where their loved ones have waited long time to hear they may be coming home. allie? >> reporter: an iranian court has agreed to set bail for the two men at $500,000 each so if they can come up with that money they will be free on monday. they are trying to put that money together to cure their release. they have been imprisoned for more than two years and just last month it appears their case had faced a set back after they had been sentenced to two years in prison for espionage. a third hiker shaw shaw was accused as well after -- sarah shaw was accused as well. they crossed over accidentally and have strongly maintained their in

morgan stanley rose 7% on news chairman will retire at the end of the year. swiss bank ubs plunged 10% after news that a rogue trader racked up $2 billion in unauthorized trades. a 31-year-old man has been arrested on suspicion of fraud. after the bell dismal quarterly earnings, r.i.m. is down 50% for the year. netflix tumbled 19% after predicting its summer price hike will cost it a total of 1 million customers. >>> the irs raked in $500 million from 12,000 tax cheats who came clean under the amnesty program. >>> finally, the free ride could be over for a new theme park in china that has a live angry bird attraction. they failed to license the ride with the game's creators. >>> lsu rolls, the red sox wilt and home improvement courtesy of josh hamilton. >>> plus, a panda on the loose causes havoc in colorado. your early morning sports headlines are straight ahead. >>> and we've got a major cooldown? the northeast but it's still hot in the southwest. your forecast is coming up. you're watching "early today." >>> good morning. if you're just waking up, this is

why should my bank or morgan stanley have fewer rights than my barber stanley morgan is the subject of jokes now they'll be able to spend hundreds of millions of dollars. attacking banking regulations and the big bucks spent on k. street journal the little guy and main street. but many say the money is no laughing matter it's a fine line between a campaign contribution and a bribe and mine is what keeps you out of jail in order to run for office in america we've got a system set up for private funds account for the bulk of the money so what would it take for americans to buy back congress let's take a look at one group's estimate all of the big lobbying interests in corporate donations included that's fifty million dollars per us senator five billion to buy back the senate and another twenty million per congressman that's eight point seven billion to buy back the house of representatives put it all together and fourteen billion dollars is what it would take to buy back an entire branch of the u.s. government big dollar donations are nothing new congress passed its first campaign contri

. >> reporter: as head of security for morgan stanley, predicted the threat of terrorists flying a planeo the world trade center. then, because he had anticipated and prepared, on 9/11, riscorla led all of morgan stanley's 2700 employees out of the south tower to safety. [ singing ] >> reporter: so how do you portray someone's life who is almost larger than life? everything he did in his life was tremendous. >> there are so many parts of him as a person that i -- i admire, and in some ways identify. i think he had a very sharp intuition. i think he was a very intelligent disciplined man. and he was the kind of person who could galvanize people to actions and beliefs deeper in themselves than they had themselves. >> reporter: and after all 2700 were out, riscorla went back in for one final check. less than an hour after it was hit, tower 2 collapsed in a thundering crush of metal, glass, paper dust and debris. riscorla never came out. >> i honestly don't think rick went up those stairs the last time thinking, well, you got to go, you got to go, this is it. i mean, did he have that convers

financial institutions are being sued, including bank of america, citigroup, goldman sachs, g.e., morgan stanley and j.p. morgan chase. you might recognize that a lot of those names got a taxpayer bailout under tarp. so we, the taxpayers, are now going after banks that we bailed out. the lawsuit claims these banks failed to identify or looked the other way when borrowers' incomes were inflated or even falsified. >> pelley: sharyl, what may come of all of this? >> we talked to experts today and they're predicting the lawsuit will be settled for something less than the $41 billion claim but cost the banks dearly at a bad time in the economy. >> pelley: sharyl, thank you very much. on the gulf coast this evening, it is no hurricane but tropical storm lee may bring dangerous flooding. lee is a slow-moving storm. the weather service tells us it may hold ten to 15 inches of rain. warnings are up from mississippi to texas. a storm surge could raise water levels two to four feet. bigad shaban is south of new orleans in lafitte, louisiana. >> reporter: well, scott, this is bayou barataria, which goes rig

hundreds of points and well and that's is awaiting the chances of the meltdown in europe well from morgan stanley says russia doesn't have much to worry about so far. russia is actually a much better position and other central european countries turkey in the region because it has less strong trade and investment relationships with europe because it's more of a global trading country and it depends on the price of commodities such as oil which depends upon growth in emerging markets such as china and india. so russia's fate is toyed with the growth of china and india are not at the moment looks reports and hasn't been affected by the downturn in developed markets as compared to other. countries i think russia has and of course with brazil as essentially a commodity exporter which is exposed to movements and commodity prices which are affected by global growth it's not actually india which are large enough that they can determine their own fate to make their own economic weather to a great degree because it depends on commodity prices which depend upon global developments southern look at the mark

and banks and geldman sacks and morgan stanley are going to get hammered because of dodd-franks and the banks make money when the u.s. economy improves and-- >> let me finish the point i'm making. the earnings are down for a variety of reason. you said one, another is that the housing market isn't coming back. >> how about the economy? >> and that's the biggest worry of all. >> where bank of america-- >> it's not the economy not coming back, it's the economy getting precipitously worse. aen that's one and those home loans going. >> i don't think that's true. i don't think you can produce evidence saying the economy is getting precipitously worse. >> i said it's the worry that it will. >> i said it's the worry that it will. >> the worry, i'm sorry. >> and persistently worse. >> you can predict that-- >> i think you're cavalier. >> i'm a customer, not an investor, but a customer and find it disconcerting when i go to the atm and says do you really need the cash today? (laughter) >> now what? >> by the way you're going to start a bank run. >> no, when you lose that much in market value acr

morgan stanley led the move higher. the stock jumped 5%, analysts defending the brokerage firm's ability to manage its risk exposure to french banks. bank of america rose 4%. it was the best performer in the dow 30. it's reportedly in talks to sell a commercial mortgage portfolio to fortress investments. and citi shares adding 4%. also strong on the dow? mcdonald's. as we told you last night, it's boosting its quarterly dividend to 70 cents a share. the stock rose more than $1 to $87.37 a share. but h.p. was one of the biggest losers on the dow-- investors still not convinced new c.e.o. meg whitman can fix the struggling tech giant. the stock closed today at $22.32, a six-year low. a lot of interest in amazon today. the company said it will hold a special event in new york city next wednesday. shares rose slightly to $223 a share on speculation amazon will launch a kindle-style tablet computer. some earnings news today moving two big cap stocks. nike surging over 5% on those solid earnings we told you about last night,

financials, morgan stanley tumbled almost 8%, citigroup down 4.5% and a 3% drop for shares of bank of america. there were some bright spots in this down market thanks to buyouts and breakups. let's start with united technologies. reportedly it's buying goodrich, the aircraft landing gear maker. the potential tie up with u-t-x lifted goodrich stock to an all- time high of $107.60. the 15% gain made it the strongest performer in the s&p 500. and then there was tyco. the stock rose almost 2.5% after the company said it will break itself into three publicly traded companies. here's how those units will be broken up: a.d.t. home security, pipes and valves, and fire protection. tyco's c.e.o. maintains the businesses are strong enough to grow individually through acquisitions. also splitting? netflix, but the stock fell on the news. the video service is breaking its business in two, one unit focused on video streaming, the other handling its once-famed d.v.d. mail-order service. the mail order business also gets a new name, qwikster. taking a look at the stock, netflix stock tumbled over 7%.

. >>> elsewhere, morgan stanley rose 7% on news chairman john mack will retire at the end of the yearswiss bank, ubs, plunged 10% after news that a rogue trader racked up as much as $2 billion of losses in unauthorized trades. a 31-year-old man has been arrested on suspicion of fraud. >>> after the bell, dismal quarterly earnings battered shares of research in motion. r.i.m. is down 50% for the year. netflix tumbled nearly 19% after predicting its summer price hike will cost it a total of 1 million customers. >>> the irs raked in $500 million from 12,000 tax cheats who came clean under its recent amnesty program. >>> and finally, the free ride could be over for owners of a new theme park in china that launched a live-action angry birds attraction. it turns out they failed to license the ride with the game's creators. oops. >>> in health news now, crediting lower smoking rates, health officials say the western states are leading the decline in new lung cancer cases with texas and california accounting for much of the improvement particularly in women. nationally lung cancer rates among

drop sharply as not amenable governor now trading at an eight month low however take up now from morgan stanley here in russia there are reasons not to pessimistic . if you look at what's happening to reserves which is the kind of results of the entire set of. transactions jim russia and the rest of the world every week we've been seeing an increase in the reserves and if you think you will export these prices and was happy with regexps i think you'll fall into the current carol picture used to be very strong. on the capitol hill it's a little bit less predictable but i think we feel certain cheerily elections it may be an increase in care for is there not to the level that you saw earlier this year so actually we expect to rebuild a strength from the good in from her going forward. and let's take a look at the markets now also with oil prices there are maxed volume rebounds in the euro and in stock markets the international energy agency cut its estimate for the round growth and some of its expectations. in the u.s. markets are trading in positive territory the hours are pretty pointless two p