Morgan Stanley’s Deep Secret Now Is Revealed

http://www.bloomberg.com/news/2011-03-23/morgan-stanley-s-deep-secret-now-is-revealed-commentary-by-jonathan-weil.html

by jswinghammer • 15 years ago

94 19 15 years ago

gaius3• 15 years ago

Fair's fair... So long as every organization or individual that takes public money has their affairs exposed to public scrutiny, I see nothing to argue with.

gcb2• 15 years ago

banks does have the hability to scrutinize all your financial life before lending you money. but all you have when giving them YOUR money is a little pamphlet.

Also, i'm pretty sure i can pay some few bucks and also have most of that information about you if so i desire.

gaius3• 15 years ago

You get a fair bit more than that when buying shares in a bank...

edge17• 15 years ago

if that $3.5b saved them, I wonder what this other $9b was for http://www.businessinsider.com/the-9-billion-check-to-rescue...

rkalla• 15 years ago

Bonuses? They don't pay themselves you know.

borism3• 15 years ago

one is a loan, another is investment.

pdenya• 15 years ago

It seems ridiculous that it's taken several years to get this info released.

shareme• 15 years ago

there is 2 year limit in place,(the law passed by Obama) so that there is not a daily run on deposits when data becomes available as obviously any recession does not last more than 2 years..

The core problem which Obama failed to understand is that these financial firms used uncoupled securities to pad their short term profits while at the same time increasing their long term risks to way beyond the capital they had.

The uncoupled securities now do not just include derivatives but also commodity contracts as exchanges no longer have the limits in place of having actual products to enter into those contracts..

Translation: They eff'd us over..

anamax• 15 years ago

> The core problem which Obama failed to understand

Assumes facts not in evidence.

Suppose, for the sake of argument, that you think that Bush intended the likely outcomes of what he did and that you think that Obama is smarter than Bush. Doesn't it follow that Obama intends the likely outcomes of what he does?

Note that Obama had a filibuster-proof majority in the Senate and a majority in the house. He still has a majority in the Senate.

Given a choice between blaming incompetence and blaming intent, why should I think that Obama is the former?

markklarich• 15 years ago

re: "The uncoupled securities now do not just include derivatives but also commodity contracts as exchanges no longer have the limits in place of having actual products to enter into those contracts." This is a subject of great debate among commodity followers, including silver and gold. See many, many discussions regarding the CFTC rules (or lack of same) around "naked" short positions--a method whereby huge banking institutions can create a false "demand" and reduce the price. Lately, it appears, (Though not verified.) that there isn't enough silver to actually meet the contracts held by people or institutions who want actual delivery. In the past, the speculators and huge banks would exit the fray before it became time to actually deliver the goods. However, rumor has it that the actual supply of real silver is so tight and the buyers (the longs) are sticking to the end, that the shorts cannot find metal to deliver and are paying off in cash. (at, of course, a premium) Its fun to watch -- harveyorgan.blogspot.com/ being one of many places. Another source is zerohedge.com. I am only touching on a much larger drama, but it looks like this is one place where the bankers are taking a hit.

euroclydon• 15 years ago

The risk of looking weak to competitors and shareholders is an inherent risk of market participation... but only after two years, apparently.

jwb119• 15 years ago

>As it turns out, the information about Morgan Stanley’s $3.5 billion discount-window loan has been sitting on the Financial Crisis Inquiry Commission’s website since last month. The panel didn’t mention it in its final report. And nobody had written a story about it before.

Makes you wonder what other sort of "non-public" information is actually out there just waiting to be found.

sks• 15 years ago

I remember a stock trading company found Microsoft's quarterly earnings report on their website hours before they were supposed to be made "public" and made a neat profit.

source : http://www.bloomberg.com/news/2011-01-28/microsoft-earnings-...

stretchwithme• 15 years ago

I don't understand how the public benefits from having the true weaknesses of companies hidden. If the Fed were truly acting in the public's best interests, it would want you to have as accurate view as possible.

Of course, the theory is that somehow this would undermine confidence in banks. But the opposite is actually the case. Banks would have to maintain reserves and lend wisely in order to get your deposits. Especially if you could actually lose your money.

Instead, everything is covered up until the government can no longer hide how bad it is. But don't worry, you're insured, right? Yes. But it turns out you're insured by you the taxpayer, so you're even more screwed now than you would have been if you had incentive to use your judgement and the clarity to see what was going on.

Smokescreen government at its worst. And all because banks tend to collapse when bad government creates massive instability in the economy to begin with.

Morgan Stanley’s Deep Secret Now Is Revealed

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