If you think Cyprus is the only problem in Europe, then you need to do some research. 3 things to check out: #1 Q4 and upcoming Q1 GDP of euro countries #2 PMI #3 balance sheets of the European banks.
Its a murder scene. At best, this whole thing lingers for 2 or 3 more years with various bank failures... or worse, GDP continues to dip, payrolls continue to dip, and more banking system failures occur and a Eurozone wide recession hits. Either way, MS has 6B in European exposure - most of any US financial company. That's not dire obviously, but it's unsettling as an investor and PPS will show that.
Recession is already there in many/most of the countries (depression in a few) as apposed to "about to hit". The MS Euro area exposure is far greater than $6B. One needs to consider the gross notional exposure and the counter-parties it has as hedges. The lack of confidence in MS is apparent with the market at nominal all time highs and MS less than third of theirs. I will reiterate that something is amiss with MS.