Morgan Stanley, I presume

According to CNBC, Morgan Stanley, about the only pin left standing, is preparing to blindfold itself and walk the plank into whomever's arms it can.

Morgan Stanley CEO John Mack wants to avoid the mistake made by Lehman Brothers CEO Richard Fuld, who brushed aside buyout offers until the market crushed shares of the firm and force it into bankruptcy.

Wall Street traders are increasingly betting that Morgan might not survive--the costs of so-called credit default swaps which are insurance policies against Morgan defaulting on its bonds, shot up on Tuesday, forcing the company's pre-announcement.

For this reason, Mack is carefully monitoring the market reaction and may indeed decide to do a deal if it looks like the firm could face a liquidity crisis as traders begin to pull funding from the firm.

That report is cited by a DJ Market Talk item, "S&P/ASX 200 Down 0.5% on Morgan Stanley Fears", with putting an "oh, really?" dampener on an earlier rally in Sydneytown. It quotes one trader as asking, rhetorically, Guambat supposes, "How many more dominos have to fall...?"

Dominos, pins, whatever.

Might the downturn not also have something to do with futures expiry? (Speaking here of index futures contracts, not Morgan Stanley's, of course.)