Morgan Panic in Part Due to CEO Misquote

"Morgan Stanley's frantic attempts to find a partner come as its shares have been hammered by concerns over its ability to survive as one of the last two large investment banks. The stock, which has fallen 71 per cent over the past year, was down 30 per cent at $14.79 at lunchtime in New York."

Even The Wall Street Journal did not mention the issue of the quote when itemizing how Morgan Stanley went on the offensive. Morgan did all the things the Journal mentioned, including fighting back at shorts and at poaching brokers from JPMorgan(JPM Quote). But Morgan also made clear that it hadn't predicted its own demise, and it demanded the retraction it got.

This one is the best, though. The New York Post, as always, crowed about the Times error in one article with the headline: " PULLED QUOTE AT NY TIMES"

And the lead: "The New York Times is still trying to figure out the old newspaper truism, 'Never let facts get in the way of a good quote.'

"The editors of The Times ran an embarrassing note yesterday discrediting one of its most attention-getting stories about the Wall Street crisis: that troubled Morgan Stanley wanted a quick marriage with equally troubled Citigroup(C Quote) to save their respective hides.

"It turns out the sole quote on which the tale was based was never uttered, the editors' note admitted."

But in an article from the same business section titled " FUNDS FLEE MORGAN, GOLDMAN FOR JPMORGAN," the Post didn't mention the false quote as a factor. In fact, it said the run of funds from Morgan and Goldman might end if the stock stabilizes. But, uh, the stock is more likely to stabilize once the panicked public realizes that the quote that incited a lot of the panic was retracted.

How quickly the business media forget. Even what is in their own section.