Can Morgan Stanley Outrun ‘The Fear Virus’?
Morgan Stanley’s stock has dropped 20% after falling as much as 35%. It is trading at around $9.50 each share. Moody’s is threatening a downgrade. People are nervous.
Should they be?
Deal Journal set out to find out. Morgan Stanley filed its third-quarter 10-K last night. The highlights of the filing show that the bank is not in trouble — or at least, it certainly was not at the end of the third quarter. Deal Journal took a look at some measures of Morgan Stanley’s health, and whether they improved or became sickly.
Overall health: Morgan Stanley is healthy. As Sanford C. Bernstein analyst Brad Hintz wrote on Wednesday, “By all traditional credit measures, Morgan Stanley is well capitalized. Pro forma for the Mitsubishi investment, gross and net leverage has declined to 19.6x and 17.0x, respectively…We calculate that the firms’ net cash capital position (pro forma for the capital raise from Mitsubishi) is a very strong $51+ billion. The earnings performance of the company has recovered. In Q3, Morgan Stanley booked diluted earnings per share of $1.32 and achieved a return on equity of 16.5%. Its legacy [lending] exposures are limited.”
Tier 1 ratio: This is a measure of a bank’s capital, and regulators watch it carefully. The regulatory minimum is 4%. Morgan Stanley ended the third quarter with a Tier 1 ratio of 12.7%, up slightly from the second quarter. It is also stronger than Goldman Sachs’ Tier 1 ratio of 11.6% at the end of the third quarter. Barclays Capital research analyst Roger Freeman estimates that Morgan Stanley’s Tier 1 may be as high as 15.7% after the Mitsubishi UFJ capital raise, which is scheduled to close on Oct. 14.
Cash: Morgan Stanley needs $22 billion in cash in the coming quarter, according to Hintz. Currently, it has $70 billion of collateralized inter-company loans that can be called, $19 billion in cash and a $5 billion revolving credit facility. Overall, Hintz believes that Morgan Stanley can keep going until the third quarter of 2009 even if all of its access to the long-term debt markets is closed.
Capital-raising plans: Mitsubishi UFJ has said repeatedly that they will stick by its plan to inject cash into Morgan Stanley.
Lending exposures: These dropped, which is a good thing in this risk-averse market. The firm’s non-investment grade lending exposures were down 14% to $21.2 billion, and regular investment-grade exposures were down 10%, to $48.8 billion.
Morgan Stanley has also reduced its reliance on collateralized financings by 16% to $180 billion. All of its responsibilities for secured funding are 100% covered by its liquidity reserves, which is up from just 39% at the end of 2007.
Level 3 assets: These are the risky, hard-to-value assets that have everyone worried. They are so hard to value, in fact, that wags long ago made a pun on the “mark to market” rule and call Level 3 assets “mark to myth.” Morgan Stanley’s Level 3 assets increased 13% to around $78 billion. The jump came mostly because of $33 billion in corporate and other debt that Morgan Stanley underwrote but, presumably, could not find buyers for. Morgan Stanley’s management did point out on the conference call that Level 3 assets were at about 8%, so the disclosure is not at all a surprise.
Liquidity reserves: Morgan Stanley said it is implementing “liquidity preservation efforts.” The firm’s liquidity reserves appear to have fallen from where they were at the end of August, which was $179 billion. Morgan Stanley didn’t disclose where they are now, except to say that they are “well in excess” of the $85 billion average in 2007. That’s a big difference between those two numbers, and a little more transparency would help. Freeman estimates that Morgan Stanley’s “liquidity reserves have likely declined 35% - 45% since the end of August to $100 billion - $115 billion. This estimate depends heavily on conservatively interpreting the language in the 10-Q,” he wrote today. However, Morgan Stanley’s has added $10 billion to its unencumbered collateral and excess liquidity, which is now $179 billion.
With all of this in mind, why is it that the markets are still punishing Morgan Stanley? The threat of a Moody’s downgrade is a big part of the threat to Morgan Stanley right now. Moody’s reasoning is that an extended downturn in the capital markets would hurt revenue and profits in 2009, and that Morgan Stanley would probably make less money in its new structure as a bank holding company.
As Fox-Pitt Kelton analyst David Trone noted, however, all the financial health in the world would not be enough to allay the “fear virus” that killed Lehman Brothers and Bear Stearns. As with Lehman Brothers, investors are not worried about the Morgan Stanley of today; they’re worried about the Morgan Stanley of tomorrow. If the current credit crisis continues for, say, another year, Morgan Stanley won’t be able to survive. That’s enough to get people worried. But that may be a bridge to cross in several quarters, not right now.
Update; Clusterstock is reporting that Treasury is considering getting involved; http://www.clusterstock.com/2008/10/treasury-plots-morgan-stanley-bailout.
Gonna get tight for this Morgan. They should explore a merger. How’bout Capital One.
I keep buying MS for very price drop. I believe Japanese bank is not stupid to pay 9B for 20% water of MS. Don’t be panic for the fear.
Wonderful article. My deepest thanks for a positive word. I knew the company was solid.
Mitsubishi did their due diligence on Morgan Stanley. They know this current downturn is just irrational fear. MS has the cash to weather the storm.
I am an underwater shareholder but this is a great company with good things going for it including far less competition. I think it will pull through without having to merge or worse. MS is very very valuable when this all settles down as they are full of great employees and have a worldwide footprint.
Rumours spread by people who made money off the CDS, puts and (very latterly) shorts together with sheer fear have reduced the share price. But MUFG is the second largest deposit bank in the world. When it buys it’s (probably bigger) percentage stake, it has the fire power to lend money to MS to service credit like almost no-other (only HSBC has more deposits in the world) and therefore it knows it can make this a success story. You get the brains and the US access backed by the second biggest deposit base in the world. Sounds like a pretty big game-changer to me….
Many smart guys did due diligence in the past on many great companies and theys is gone! Japanese are not the brightest guys in the world. There stock market hasnt gone up for decades.
At these prices should MS go private? Or at least buy back like crazy. If you believe those numbers above.
Mitsubishi is looking long term. The deal will allow MS access to a large deposit base which will boost liquidity. I’m assuming they also have the option of money from the Fed. A few years from now, MS will be one of if not the greatest institution in the world.
It is going to zero. Equity holders will be wiped out.
If you think its a deal here you should look at the bonds they are trading between .40 - .60 cts on the $ the yields are between 20 and 50%
I agree, I think Mitsubishi knows what they are getting in to, is taking a very long-term view, and will do whatever is required to see that their investment is protected given the market sentiment…IMO you’ll see more than simply a check being written next week, I think the two companies will become much more tightly integrated in some ways, if not an outright acquisition, because that’s how the benefits will be realized…
MS is a strong company full of great people and lead by one of Wall St’s finest, John Mack. MUFG is a global palyer and together with MS’s global footprint they will be a power house.
all these beautiful analysis is okay, but people fail to understand any bank,even a well capitalized bank, is highly leveraged compared to other industries. Banks basically operate on trust & credibility. If lenders decide to pull the plug on a particular bank, in other word, bank run, no bank can survive since you can’t just liquidate your assets overnight to fulfill the obligations. The stock price is key to a bank’s survival. Such drastic drop in stock prices generally means sharks are getting closer and closer.
I don’t believe MS can survive.
Having been a past employee of MS, I can tell you that they are soooo top heavy with managers and vice presidents who, unfortunately for John Mack, are really only concerned about their pay and lucrative bonuses. Once John Mack is forced to look at each and every department, people will be let go faster than Zoe Cruz, his once second in command.
Thank you for pointing out the FACTS, and not hysteria bred panic that has driven down the stock. There is NO basis for this happening when the fundamentals are so sound. To use an analogy, if you can block and tackle exceptionally well and couple that with a solid program and LEADERSHIP, you have a good chance to win in the toughest scenarios.
Great company, strong franchise. Excellent fundamentals and leadership. Will survive this and be picking up the opportunities in the future while the panicky now look on in envy.
Its game over for Morgan Stanley. HSBC have been ready to buy MS for the last 5 years and will eat it up for breakfast on Monday when the price drops to $2
New to the block. Seems the disappearance of so much competition and switch to bank holding company should make life good for GS and MS. If MUFG doesn’t turn greedy and just finishes the deal, show some of that risk-taking/can-do spirit Wall St. thumped their chest about the past 5 years, could contribute to jump start sentiment to turn this market ship around in a more positive direction. Kind of sick of hearing how much cash the big wallets are holding back from the market- use it you pussies, and jump start the economy!!
Don’t think MUFG would let HSBC get MS for 2$. unfortunate for a good company like MS to go thru this. hope they survive…
fear is an unsatisfactory explanation. my guess is that sellers know something wh will become apparent to the rest of us later.
HF clients are gone. mack reduced to blaming shorts and mark-to-market — both of which have made MS what it is today. that’s all, folks. won’t make the week.
How much lower can it get?
First off, I do not own any financial shares. Just heavily invested in the markets through 401K, currencies and some industrials. Can;t afford to buy anymore and can’t afford to sell. I need to be in a cash conservation mode. Obviously, I am down. I’m upset, but not angry enough to want to destroy the U.S. financial systems. I may be upset with a family member, but you try to fix the relationship, not abandon it or destroy it. This is what the angry American mob mentality is demanding by going after one U.S. financial institution after another. You’re angry at the reckless risk takers on Wall Street? How about the irresponsible market speculators who are profiting by spreading false rumors and fear? Not only are these speculators making profits off of average Americans (indirectly), but they are destroying the U.S. financial institutions. They are like the leeches who have a lot to gain by seeing you sever your ties with family members, like drug dealers and abusive boyfriends or husbands (or girlfriends and wives.) As this article factually states, MS has strong fundamentals to withstand the turmoil and the potential to emerge better and stronger. People, wake up and stop falling into the hands of these speculators who have alternative motives to further their gains. The U.S. needs a strong financial system to remain a global player. Without a strong financial system, you cannot have a strong economy. Without a strong economy, you cannot have a strong military. We saw what happened to America when Lehman was allowed to fall. No matter how angry I am, I do not want to destroy my home.
“rooting” is the voice of reason. mob-mentality instincts make the lemmings of norway jump! i’m not that good a swimmer and prefer to stay high and dry …
SUBTERRANEAN DOW JONES BLUES
(to Subterranean Homesick Blues, Bob Dylan)
WilliamBanzai7
Johnny’s in the basement
Trading on the internet
Out on the pavement
Thinking about the government
The banker in the trench coat
Kicked out, laid off
Says he’s got a bad cough
And wants his mortgage paid off
Look out kid
It’s that bad trade you did
God knows when
But you’re doin’ it again
You better duck down the alley way
Lookin’ for a new scam
The man in the red cap
With the the big bailout pen
100 Billion dollar bills
You gotta find some new thrills
Big Mack’s got a big position to foot
Morgan’s full of CDS soot
Talkin’ that Lehman put
All of us on same bus but
The markets tanked anyway
Mack says that many say
We can go bust anyday
Orders in from Ebay
Look out kid
Don’t matter what you did
Walk on your winged tip toes
Don’t try “No Doz”
Better stay away from those
Carry round a financial fire hose
Hard to keep a clean nose
Watch the men in plain clothes
You don’t need a weather map
To know which way your stock goes
Get sick, get well
Hang around a red ink well
Closing bell, hard to tell
If anything their goin’ to sell
Try hard, get tarred
Get back, go to jail
Get enjoined, jump bail
Join a hedge fund, if you fail
Look out kid
You’re gonna get hit
But losers, cheaters
Crooked subprime CDO dealers
Hang around with 500 dollar Chelsea strippers
Sitting in the toxic asset whirlpool
Lookin’ for a new fool
Don’t follow market leaders
Watch the Federal debt meter
Ah get burned, keep warm
Shorts dance, lose your pants
Get dressed, sell distressed
Try to be a new success
Please buy, don’t sell
Its a steal, need a lift
Twenty years of Wall Street hell
And they put you on a burger shift
Look out kid
Try to keep it all hid
Better jump through a loophole
Light yourself a roman candle
Don’t get caught wearing Greek sandals
Try to avoid the market scandals
Don’t wanna be a Wall Street bum
You better chew some new gum
The Fed pump don’t work
Cause the vandals stole the handles
The interaction between CDSs and stock selling explains much of what’s going on with Morgan Stanley and elsewhere. If you’ve written CDSs on MS debt, and Moody’s makes noises about a downgrade, for example, you’ll sell any MS stock you own or enter a new short position to meet the margin call on the CDSs. It doesn’t matter what you believe about MS’s fundamentals–the logic of your CDS position drives you to sell. Moreover, given the illiquidity and opacity of the CDS market–remember that it’s all over-the-counter–it’s much easier to short the stock, rather than to re-negotiate the CDS or enter into an offset. Finally, if you have those CDSs, you’ve got to believe that many others do, as well–since they’re OTC, you really don’t know–so you wind up selling maybe just a bit more of the stock to take account of sales of others. (No one wants to be last out-of-the door, after all.) Many problems will be solved when the CDSs are forced on to an exchange. Indeed, I’m beginning to think that that may be the closest thing there is to a silver bullet that we’ll see in this situation. Go NY Fed!
If you believe we will soon be in a deep depression, then liquidate all your assets and put it under your mattress and become a commentator on CNBC. If you have half a brain and believe this panic is a near-term phenomenon, then you need recognize that this will be the greatest buying opportunity of your life. Look, this liquidity freeze is driven by banks and other lenders fearing another Lehman. Lenders are clearly in short-term survival mode (i.e., trust no one and stockpile the cash). Eventually, the fear will die due to the strong coordinated commitment of central banks around the globe and all the liquidity being pumped into the system. And that means lenders will have no choice thankfully but to switch to long-term survival mode (i.e., revenues and profits). In other words, they will need to lend. So if you believe it is a near-term phenomenon, then you need to buy (don’t try to time the bottom…way too much volatility to ever be able to do that). And you need to buy into those great companies that were unjustifiably beaten down by fear. And, in my mind, the biggest standout is Morgan Stanley. Simply stated, they have one of the strongest balance sheets out of any financial services firm on the planet, the lowest securitized marks of any broker dealer and one of the highest Tier 1 Capital Ratios of any bank holding company. A buddy of mine told me that John Mack said at an employee townhall that the firm will not have to tap into the $700bn TARP fund—that’s a testament to Morgan’s financial strength and the conservative marks on their balance sheet. And think hard about this: Goldman’s market cap is currently FOUR TIMES the market cap of Morgan Stanley. Morgan blew away Goldman in the most recent quarter, and Morgan is far better positioned in this new environment with it’s platinum retail broker-dealer business (heeelllooo…not a capital intensive business AND a great source for the oh-so-important deposits). And perhaps even more importantly, Mitsubishi (the SECOND LARGEST depository institution in the world) will likely prove to be more of a strategic alliance than a capital injection (what else does Warren have to offer besides Geico insurance for Goldman employees’ Ferraris?). To put it simply, Morgan is no Lehman…it ain’t even close. The current fear in the market will abate as quickly as it came (it always does) and Morgan’s funding is already lined up to at least 3Q09 (more than enough time to ride out the storm until its CDS spreads decline). Morgan has a long future and I’m going long in their stock. And don’t thank me if you make a big profit off of Morgan. You can thank Cox–that career tort lawyer/politician running the SEC who allowed the shorts to create this golden opportunity.
i am sure the mufg/ms contract is ironclad with no outs. think of poor warburg pincus: everybody said they would pull out from mbia; they didnt and couldn’t
Yes and all this analysis does NOT highlight their credit default swap counter party exposure
I suspect MUFJ may not pull out altogether but may want a better deal in view of the drop in MS’s share price. $9B for 20% doesn’t make sense now. What about, say, $5B for 20%, or $9B for 40%, etc? Japs are humans just like you and I. If you’re UFJ, what would you be thinking now?
MS is as strong an institution as there is out there right now, as strong or stronger than GS, BAC, JPM, C etc. Not in the position of MER and LEH at all, have avoided the huge wrritedowns and recklessness that crushed those firms. Also, MS has been much more aggressive in their markdowns than GS, C, JPM. If MS can be driven down by the shorts, with it’s clean and stable balance sheet, then there will be no firms that will survive, as the confidence will entirely erode in the entire system. LEH was in bad shape, MS is not, smart people understand that. Also, it was amazing that the the big drop in the stock was right when shorts were allowed again. That is no coincidence, they are trying to fuel the rumors and panic for their own gain, as soon as the short ban was lifted, the rumor was floated that MUFJ was backing out..again no coincidence. This is a concerted effort by a cadre of hedgefunds. The difference is that MS can wait it out regardless of the stock price, and the Fed is not going to let them fail, shorts will get squeezed very soon, Mack et al. are all in Washington this weekend, and you can be sure that they understand that MS going down would crush the system, so next week, shorts get crushed. MUFJ deal closes, with Fed backstops, people realize that MS trades at 20% of book value and they pile in realizing this is one of the great buying opportunities of their lifetime. A lot like the 1990 buys of many banks.
Thank you, Peter Stan. That was an informative post. Please let us know any more thoughts you have on the subject of CDs.
MUFJ has a great opportunity to leverage this investment into a full, national banking presence in the US. The opportunity of a lifetime. By riding to the rescue of MS, they can be assured of a green light from all the US banking authorities. “You have cash? Cash?!!! Make way for Mr. Mitsubishi! Please, Mr Mitsubishi-san. We will guarantee you the best table in the house.”
Best case for MS: MUFJ funds the deal on Tuesday, but they participate with Treasury in an additional issue of 10% preferred shares. How much does Mack need? Enough to persuade the shorts that they are betting against the US government. How much is that? How long is a piece of string? How long and how far are the company’s $900 billion in assets going to decline? How much can MS earn without leverage?
If MUFJ balks, they are basically saying the US banking market is not worth considering for the foreseeable future. That there is no bottom in sight.
Disclosure: I am long MS.
dmoney, you are dright BUT you cant blame the shorts. They are just trying to make money, like you and I and John Mack (who has been short many times in his life.)
There is never smoke without fire. Shorts can’t succeed if there isn’t some rational basis for the fear. MS isn’t some penny-stock you can manipulate like that. I suspect Peter Stan is onto something. Also, remember the market discounts 12 months in the future. If the credit crunch continues; if the absolute absence of any IPO’s continues; if the value of the $900B assets MS owns continues to deteriorate; MS earnings will dry up completely in 12 months. Maybe that is what the market is telling us? I hope not…
I suspect the credit meltdown is enough of a spanking for Hank the Terrible and Big Ben. Hopefully, they will make sure that there is never another Lehman. What was a manageable situation resolvable with $35-60 billion now seems to be spirally out of control. They played right into the hands of the short stock/long CDS crowd. They need to retake Banking 101: “Some financial institutions are too big to fail.”
I guess the most galling part of any rescue is that the employees of investment and commercial banks were being paid huge bonuses for being lemmings. (See the FedEx commercial for a good depiction.) As long as everyone was doing the same thing, their positions became self-fulfilling and they all gots a big bonuses. Eventually, the good times come to an end and someone must pay. It is usually the shareholders. Management usually goes onto another overpaid position at a different firm.
I don’t know how we solve this problem, since it occurs again and again. Maybe, we need to send some to prison, where they will meet others of their ilk.
I think that the SEC should override any exchange rules that limit the number of its shares that a corporation can buy each day. This was done in 1987. Let Morgan buy most of its outstanding shares. Then, when the shorts have to settle and can’t come up with the stock, there will be a buy-in in the cash market. This would be brutal for the shorts. (Fuld wanted to do this for Lehman, but couldn’t pull it off.) Special Ops at Treasury (a.k.a, the SPU group) should also participate. Maybe, the collusion rules can be eliminated and allow Mitsubishi UFJ to participate.
Paulson lead coup to overthrow Corzine to take over Goldman Sachs.
Hank the Tank is arguably the most powerful man in the world right now.
Could the whole world be playing right into his hands? A world where he is the King Maker. A world where he gets to shape the financial landscape to his vision and decides who survives and who thrives?
It certainly looks that way!
Barbarians have taken over the US Govt. The $700bill program would not fix anything. It is going to benefit mostly the offshore funds. There is no end to these programs just like the welfare programs for losers who dont want to work for a living and keep making illegitimate babies and they keep wanting more programs. Nothing would be fixed and it will be a long time before the stock market recovers. Sell your stocks. And Death to Barbarians.
TraderB wrote “I think that the SEC should override any exchange rules that limit the number of its shares that a corporation can buy each day. This was done in 1987. Let Morgan buy most of its outstanding shares. Then, when the shorts have to settle and can’t come up with the stock, there will be a buy-in in the cash market. This would be brutal for the shorts. (Fuld wanted to do this for Lehman, but couldn’t pull it off.) Special Ops at Treasury (a.k.a, the SPU group) should also participate. Maybe, the collusion rules can be eliminated and allow Mitsubishi UFJ to participate”.
That’s the problem we have now/going forward - people/government changing the rules after the fact (retroactively). The role of the government should only be enforcing laws. The government shouldn’t unilaterally change contracts entered into by consenting private parties after the fact. Hello Nationalist Socialism - it is here - and of course some of the favored people/government officials/advisors will get filthy stinking rich in the process, while the long-run economic prospects of the nation and the world are being thrown down the toilet. I respected Paulson from when he drew the line in the sand with Lehman Brothers (despite the bath I took on that) until 2 days later when he bailed out AIG, and then the intervention/perversion of capitalism only got worse after AIG. Forget Iraq, Bush should be impeached for not firing Paulson.
You are right they are squeezing the middle class from both ends. Ghetto Punks use their penis as a weapon to produce babies that live on welfare and themselves go on disability and the wall street punks use their college degrees to make bets they cant afford to pay back. They both want programs and more programs and there is no end to it.
The whole cause of this crisis was Paulson letting Lehman fail - he should be fired for that alone. As others have noted, Lehman was too big to fail. Not too big to wipe out the common or fire the management and claw back their bonuses, but it has been too big and painful to unwind everyone’s exposure to Lehman.
Fundamentally the banking system - any banking system - relies on trust. I trust that my local bank will backup my checking account and that the FDIC is insuring it, otherwise I’ll take my paycheck in cash and keep it in the cookie jar.
For the amount of interest I’m earning on that checking account (appx 0), it’s not reasonable for me to do due diligence to decide for myself that the bank is solvent - nor is the bank going to give me access to their books and records.
The same is true for interbank lending. Banks need to be able to trust one another to make short-term unsecured loans. Once that trust was destroyed - by Paulson saying that Lehman’s counterparties should have seen this coming - no one is willing to make unsecured loans. The system simply can’t function.
The only way to fix this is to restore that confidence in the system. The G7 needs to come out and say they will not allow another large bank to fail - before the markets open on Monday. This will finally allow banks to lend to one another and start to thaw the credit markets.
Peter Stan is absolutely right that these bank ‘runs’ are feedback loops centered on the CDS’s. As the stock price goes down, the bank ratings go down and the prices of CDS’s rise. Everyone who has written a CDS on MS has to sell more stock to hedge that position and the spiral continues.
The only way to fix this is to create a sharp reverse in the CDS’s for the major banks, forcing unwinds of those CDS/short stock positions. Explicitly guaranteeing the debt of the banks would do that - leading to a virtuous cycle, and pretty much eliminating the need to ever pay out on that guarantee.
Morgan Stanley is going under – at least the equity likely will get zeroed out or close to it. Mitsubishi will not inject money at 63% premium, nor will the Treasury (even though I do not trust Paulson on anything).
Their business model is broke anyway. So MS equity holders and employees brace yourself.
We can’t allow Morgan Stanley to go under. We can’t put our country in a situation such that the only two surviving financial institutions are JP Morgan & Goldman.
If Glass Steagall was not repealed, then Merrill Lynch would have been out of business by the end of the business week with the BAC merger. Morgan Stanley and Goldman should have followed suit and merged their institutions. Instead of listening to the majority, these banks and the attitude of their heads decided to become bank holding companies. This is ridiculous! These people’s egos are so large that they can’t even listen to reason which is probably what got them in trouble in the first place. These I-banks need to merge with capital intensive banks or risk being stamped out of existence. I fear this is MS and GS’s last chance to do so. Unbelievable the egos of these people… simple unbelievable. this is global market place and anyone with high leverage has a hit man after them. Don’t these egotistical fools understand this??
The sooner these firms go bankrupt the sooner this mess will be resolved.
Bought 10,000shares of Morgan Stanley on Friday! Their ready to more forword to become a great us bank.
Those involved in taking down Morgan should be thrown in jail for life. This is financial terrorism against this country.
On September 15, 2008 the number of short sales executed on Morgan Stanley more than tripled the average short sale volume of the previous 9 trading days as it spiked to over 7.6 million shares from an average of 2.5 million shares. The market closed down on the day over $5.00 closing at $32.19. September 16 witnessed another doubling in short volume to 15 million shares as the volatility in Morgan Stanley grew with a trading range of $23.00 – 32.00 closing at $28.00.
September 17, 2008 witnessed a doubling again as