• Tag Archives Morgan Stanley
  • Crackdown Comes To Wall Street: Morgan Stanley Fires Harold Ford Jr Over Alleged Sexual Misconduct

    Ten years after leaving Congress, Harold Ford Jr could be the canary in the coal-mine for Wall Street as the global awakening to sexual abuse strikes a bulge-bracket bank.
    Harold Ford Jr. ‘has been terminated for conduct inconsistent with our values and in violation of our policies,’ Morgan Stanley spokeswoman Michele Davis said in a statement to Bloomberg News.
    Huffington Post reports that the bank’s human resources department investigated claims he harassed a woman he met in a professional capacity.
    In two interviews with HuffPost, the woman alleged that Ford engaged in harassment, intimidation, and forcibly grabbed her one evening in Manhattan, leading her to seek aid from a building security guard. The incident took place several years ago when Ford and the woman were supposed to be meeting for professional reasons. Ford continued to contact her after the encounter until she wrote an email asking him to cease contact.
    The email, which was reviewed by HuffPost, shows that the woman emailed Ford after he repeatedly asked her to drinks. She asked him not to contact her anymore, citing his inappropriate conduct the evening where he forcibly grabbed and harassed her. Ford replied to the email by apologizing and agreeing not to contact her.

    This post was published at Zero Hedge on Dec 7, 2017.


  • “You’re Right, I’m A Threat To Big Banks” – UK Opposition Leader, Jeremy Corbyn, Lashes Out At Morgan Stanley

    Earlier this week, Morgan Stanley published a report arguing that UK opposition leader, Jeremy Corbyn becoming Prime Minister, was a bigger threat to UK asset markets than Brexit. MS saw a two thirds chance of a snap UK election in the second half of 2018 when UK can’t secure a satisfactory Brexit deal and the ruling Conservative party fractures. This could lead to a sharp swing in political support towards the far left, Corbyn’s ascension, a 32% crash in the Footsie 100 index, another big fall in Sterling, nationalizations and irreparable damage to free markets…basically heaps of bad stuff. The Guardian quoted from the MS report.
    ‘From a UK investor perspective, we believe that the domestic political situation is at least as significant as Brexit, given the fragile state of the current government and the perceived risks of an incoming Labour administration that could potentially embark on a radical change in policy direction. ‘Against this backdrop, even if we see good progress in the Brexit negotiations, the scope for UK sensitive assets to rally may be muted, unless we also see an improvement in the government’s position in opinion polls.’
    MS equity strategist, Graham Secker, handed out a warning for UK investors, which was reported by Bloomberg.
    ‘If I am a U. K. equities fund manager, I am more concerned about a potential change in the domestic political government than I am about Brexit,’ Secker said at a briefing Monday. ‘You need to think about tax rates going up, about nationalization, about an economic system which has favored capital over labor for last 10 to 20 years shifting to favor labor over capital.’

    This post was published at Zero Hedge on Dec 1, 2017.


  • BMO Sees Risk Of Curve Inverting “As Early As March 2018”

    Over the weekend, we published an analysis from Citigroup looking at how long after the yield curve inverts do investors “have to worry.” The results were interesting: as Citi wrote, while sometimes inversion provides a timely signal for the economic cycle a la 2000, “where Professor Curve predicted almost the ding-dong high in the SPX”, other times, like the 2006 inversion, dished up 7 months of pain for equity bears, with 18% further upside for the SPX. The same occurred for the 1989 episode where equities continued to rally 22% into the 1990 recession.

    Whatever the timeframe between inversion and subsequent events, however, the curve first has to invert. So when will that happen. One bank provided a surprising answer earlier this week, when Morgan Stanley forecast a “completely flat” yield curve around the time of the FOMC’s September meeting.
    Now, in its 2018 rates outlook, BMO’s Ian Lyngen and Aaron Kohli have unveiled a far more aggressive forecast, warning that there is a “risk of an inverted 2s/10s curve as early as the March meeting – if not, then by June.”
    Here are the details, as excerpted from the report:

    This post was published at Zero Hedge on Nov 30, 2017.


  • “Alexa, This Is Going To Hurt”: These Companies Will Be Destroyed By Amazon Next

    From Morgan Stanley overnight:

    The reason the S&P healthcare sector is lower on the day…
    … with distribution names getting hammered, is because in a report published overnight, Morgan Stanley analysts predicted that the sector, and severeal specific names, are most in danger of being targets of Amazon’s unstoppable monopoly juggernaut, soon to be scheduled for Bezosian eradication.
    As MS explains, it has identified “attractive subsectors and profit pools that Amazon could drain to fund disruption.” MS assumes a 5% hit to prices when Amazon enters a sector, estimate the EPS impact on healthcare companies, and look at what the stocks are pricing in after the recent sell-off.

    This post was published at Zero Hedge on Nov 20, 2017.


  • Activists, Including Cerberus, Take 6.9% Stake In Deutsche Bank

    The Deutsche Bank story has evolved rapidly this morning: Bloomberg reports that Deutsche Bank had attracted a ‘new top investor’ in the ongoing process of its endless restructuring, then Handelsblatt tweeted that Morgan Stanley acquired a 6.68% shareholding on behalf of activist investors.
    The bank confirmed shortly thereafter that the new DB shareholder was Cerberus Capital Management, the New York-based private investment form with $40Bn AUM. Cerberus CEO, Steve Feinberg, owns 3% according to the report, although it’s not clear which parties own the other 3.86% acquired by Morgan Stanley at this stage.
    Cerberus specializes in distressed investing which, obviously, is a perfect description of Deutsche Bank’s current circumstances. It was set up in 1992 by Feinberg and William L. Richter, currently senior managing director. Feinberg started his career as a trader at Drexel in 1982 and was described as ‘secretive’ by the New York Times. He famously said to Cerberus shareholders.

    This post was published at Zero Hedge on Nov 15, 2017.


  • Morgan Stanley: “If Central Banks Push Back, Asset Prices Face A Severe Challenge”

    As increasingly more analysts and Fed-watchers have suggested in recent months, the one catalyst that could send the market into a tailspin is for the Fed to get what it has so long wanted: a sudden spike in inflation. From Albert Edwards (who looks at record U. S. vacation plans as an ominous sign of rising wages), to Eric Peters (who warned that pent up inflation could unleash a “nightmare scenario” for the next Fed chair), to Aleksandar Kocic (who yesterday explained why the market is vulnerable to bear steepening of the curve with the Fed “massively negatively convex to inflation risk”), on Sunday Morgan Stanley’s chief cross-asset strategist, Andrew Sheets joins the warning and observes that at a time when things are finally starting to look up for the global economy, “this puts central banks in a challenging position. Inflation remains below target. But current policy means some of the easiest financial conditions ever observed, just as growth is picking back up, regulation is backing down and memories of the last crisis fade.”
    As a result, Sheets believes that “current policy rates and financial conditions look unsustainably easy relative to the strength of global growth.” Which means that the response is once again in the hands of Central banks, who hold the key to determining when to push back. “If they do, asset prices face a severe challenge” Morgan Stanley warns, but maybe not yet: “until they do, we should be willing to accept that prices can persist above ‘fair value’.”
    Andrew Sheets’ full note is below:

    This post was published at Zero Hedge on Nov 12, 2017.


  • Lending Club Crashes Near Record Lows After Slashing Guidance

    Despite record high stocks, record high consumer confidence, and ‘full’ employment, LendingClub is struggling to originate high-enough quality loans – crashing almost 20% after slashing its Q4 outlook.
    CEO Scott Sanborn on LendingClub’s conference call pointed to a new credit model that represents “a tightening with an overall shift to higher-quality grades and higher quality approvals within grades,” and said Equifax’s significant data breach “has put consumers on edge.”
    The stock is now back near record lows…

    Analysts are watching what the company will say at its Dec. 7 investor day; some cut their price targets…
    MORGAN STANLEY (James Faucette)
    3Q shows “credit box setback,” with origination growth hurt as LC tightens credit, re-calibrates marketing with launch of 5th gen credit model Targets expected at investor meeting will “weigh heavily”

    This post was published at Zero Hedge on Nov 8, 2017.


  • “Does Yesterday’s Selloff Have Legs?” – Morgan Stanley Answers

    Does yesterday’s modest – if sharp – selloff in stocks have legs? That is the question Morgan Stanley’s Institutional Equity Division director Chris Metli asks in a note to clients overnight. As Metli writes, the moves have been exacerbated by the lack of protection investors have on and their rising equity exposures over the last month.
    The below charts update the positioning in options and futures that QDS noted two weeks ago – in general investors have continued to get more bullish. Meanwhile, as MS Equity Strategist Mike Wilson has noted 3Q earnings are now largely in the price and with the SPX rally overextended, earnings season should be a ‘sell the news’ event as there is “greater risk for a correction than we’ve seen in a while“.

    This post was published at Zero Hedge on Oct 26, 2017.


  • Trump’s Fed Picks? More of the Same!

    This week President Trump revealed his final five candidates for Federal Reserve chair. Disappointingly, but not surprisingly, all five have strong ties to the financial and political establishment. The leading candidates are former Federal Reserve governor and Morgan Stanley banker Kevin Warsh and current Fed governor, former investment banker, Carlyle Group partner, and George H. W. Bush administration official Jerome Powell. Gary Cohn, current director of the president’s National Economic Council and former president of Goldman Sachs, is also on Trump’s list.
    Trump is also considering reappointing Janet Yellen, even though when he was running for president he repeatedly criticized her for pursuing policies harmful to the middle class. Of course candidate Trump also promised to support Audit the Fed and even voiced support for returning to the gold standard. But, he has not even uttered the words ‘Audit the Fed,’ or talked about any changes to monetary policy, since the election.
    Instead, President Trump, in complete contradiction to candidate Trump, has praised Yellen for being a ‘low-interest-rate-person.’ One reason Trump may have changed his position is that, like most first-term presidents, he thinks low interest rates will help him win reelection. Trump may also realize that his welfare and warfare spending plans require an accommodative Fed to monetize the federal debt. The truth is President Trump’s embrace of status quo monetary policy could prove fatal to both his presidency and the American economy.

    This post was published at Ludwig von Mises Institute on Oct 23, 2017.


  • “More Of The Same” – Ron Paul Laments Trump’s Fed Picks

    Authord by Ron Paul via The Ron Paul Institute for Peace & Prosperity,
    This week President Trump revealed his final five candidates for Federal Reserve chair. Disappointingly, but not surprisingly, all five have strong ties to the financial and political establishment.

    The leading candidates are former Federal Reserve governor and Morgan Stanley banker Kevin Warsh and current Fed governor, former investment banker, Carlyle Group partner, and George H. W. Bush administration official Jerome Powell.

    This post was published at Zero Hedge on Oct 23, 2017.


  • Morgan Stanley: “Client Cash Is At Its Lowest Level” As Institutions Dump Stocks To Retail

    The “cash on the sidelines” myth is officially dead.
    Recall that at the end of July, we reported that in its Q2 earnings results, Schwab announced that after years of avoiding equities, clients of the retail brokerage opened the highest number of brokerage accounts in the first half of 2017 since 2000. This is what Schwab said on its Q2 conference call:
    New accounts are at levels we have not seen since the Internet boom of the late 1990s, up 34% over the first half of last year. But maybe more important for the long-term growth of the organization is not so much new accounts, but new-to-firm households, and our new-to-firm retail households were up 50% over that same period from 2016.
    In total, Schwab clients opened over 350,000 new brokerage accounts during the quarter, with the year-to-date total reaching 719,000, marking the biggest first-half increase in 17 years. Total client assets rose 16% to $3.04 trillion. Perhaps more ominously to the sustainability of the market’s melt up, Schwab also adds that the net cash level among its clients has only been lower once since the depths of the financial crisis in Q1 2009:

    This post was published at Zero Hedge on Oct 17, 2017.


  • Morgan Stanley Sees “Greater Risk For A Correction Than We’ve Seen In A While”…But There’s A Catch

    As U. S. equity markets casually melt up to all new highs with each passing day, Morgan Stanley Equity Strategist Michael Wilson, whose 2,550 year-end price target from back in August was just breached in a matter of months, says he’s getting somewhat concerned given Fed tightening, tax cut legislation that looks increasingly unlikely to pass, USD strengthening and extreme levels in pretty much every economic indicator which will make future improvement nearly impossible.
    Given that, Wilson says he now sees “a greater risk for a correction than we have seen in a while…”

    This post was published at Zero Hedge on Oct 16, 2017.


  • Why One Trader Just Called It – “Today Is The Start Of The Market Changeover Process”

    The record-breaking streaks of un-dipping gains; the “epic” bull market (Morgan Stanley’s words, not ours); and the total and utter collapse of all risk premia (equity and credit alike) is all about to end according to former fund manager Richard Breslow: “as the long running debate about lack of volatility in the markets continues, I’ve got some good news for you. As long as you promise to be happy with what you wish for. It’s about to change.”
    Investors are fearless…
    ***
    And reaching for yield, no matter what…

    This post was published at Zero Hedge on Oct 11, 2017.


  • Even Wall Street’s Biggest Bull Calls It: “Q3 Earnings Are A Sell The News Event”

    How do you know stocks are a little overextended? A good indicator is when even the most bullish sellside analyst on Wall Street, Morgan Stanley’s Michael Wilson, whose year-end price target of 2,700 is the highest of all his peers, warns that stocks may see “pullback or consolidation” and that the coming earnings season may be a “sell the news event.”
    Looking at the recent surge in the S&P, Wilson writes that broad stock index had gotten ahead of itself, reaching the low end of the bank’s short term target (2550-75) for the index prior to earnings beginning (it hit 2,552 earlier this morning). He attributed this rush to buy stocks on the “too low” consensus forecast for Q3 EPS:
    The consensus bottom-up forecast for 3Q S&P 500 is just 2.6% and appears too low. A strong 1H and a reluctance of corporates to raise guidance meant that mechanically 2H numbers needed to drift lower. With continued strength in economic growth and momentum in our proprietary leading earnings indicator we think companies will once again deliver versus consensus expectations. Look for continued contribution to overall earnings growth from Tech, Energy, and Financials (ex-Insurance). Accounting changes may also bring forward some earnings recognition, further supporting earnings growth. While the market will be focused on earnings over the next few weeks, bigger picture, NTM EPS estimates continue to rise, which should be a bigger driver of the market’s direction. Looking past calendar year 2017, Wilson underscores the departure observed previously in that twelve month forward earnings have continued their upward trend, instead of being dragged sharply lower, “so the upward trend in NTM EPS is an important factor to consider when thinking about the primary direction of the market.” Indeed, 2017 and 2018 so far appear different from the past three years, which saw zero EPS growth and the only upside in the S&P was due to multiple expansion, i.e., central bank liquidity. This time may be different… unless of course there is a sharp economic decline, which would lead to – you guessed it – an earnings drop.

    This post was published at Zero Hedge on Oct 9, 2017.


  • A $1.5 Trillion “Quantamental” Market Opportunity

    While the debate rages if retail investors have eased on their boycott of the stock market, making it increasingly difficult for institutional investors to dump their holdings of risk assets to Joe and Jane Sixpack even as active investors continue to suffer unprecedented redemptions amid a historic shift from active to low-cost, factor-driven passive management, in today’s Sunday Start note from Morgan Stanley Andrew Sheets, the cross-asset strategist points out that the next $1.5 trillion market opportunity may be a fusion of retail and institutional preferences, namely a low-cost quant approach to investing, coupled with a legacy, fundamental strategy.
    As Sheets writes, “$1.5 trillion of AuM currently managed under quantitative guidelines could continue its double-digit growth over the next five years. Part of this growth is a ‘pull’ from investors broadening their search for risk premium and uncorrelated returns at lower fees than traditional alternatives. Part of this is a ‘push’, as asset managers see systematic strategies that lend themselves well to automation and scale, offering value over pure ‘beta’ in a traditional active management framework. Relatively small further reallocation by asset owners towards these strategies could still drive significant growth.”
    And while that may come as soothing words to asset managers scrambling to shift from fundamental to a fusion, or “quantamental” investing approach, Morgan Stanley then sets a cautious tone asking whether “this growth is occurring at the wrong time” pointing out that “there are serious concerns over whether the flow we’ve already seen into these strategies explains a recent deterioration in performance, and is leading to a dangerous ‘crowding’ of too much money chasing the same factors.”
    This goes to the whole “ETFs are socialist products which are destroying both portfolio selection and capitalism, and making markets illiquid, fragmented and at risk of seizure” argument that has been discussed here over the past few years.

    This post was published at Zero Hedge on Oct 1, 2017.


  • LBMA Silver Price Benchmark – Changes, but no Wider Participation

    LBMA Silver Price Benchmark – Changes, but no Wider Participation On 21 September, ICE Benchmark Administration (IBA) announced that it will take over the administration of the daily LBMA Silver Price benchmark auction beginning Monday 2 October. This LBMA Silver Price auction is the successor to the former London Silver Fix auction. The auction takes the form of trading unallocated silver positions on an electronic platform. The resulting price from the daily auction provides a daily silver price reference rate or benchmark which is used widely throughout the global precious metals industry. It is also now a Regulated Benchmark, regulated by the UK Financial Conduct Authority.
    Bizarrely, even though it has now been more than 3 years since this new LBMA Silver Price auction was launched, there are still only 7 direct participants in the auction, a fact which flies in the face of all the previous promises from the LBMA that the rejuvenated silver auction would allow dramatically wider auction participation. These 7 participants are HSBC, JPMorgan, Morgan Stanley, Bank of Nova Scotia – ScotiaMocatta, UBS Toronto Dominion Bank, and China Construction Bank.
    Even more surprisingly, from 2 October, ICE states that only 5 of these 7 bullion banks, namely HSBC, JP Morgan, the Bank of Nova Scotia, Toronto Dominion Bank, and Morgan Stanley, will continue to participate, with UBS and China Construction Bank staying on these sidelines because they do not currently have the IT systems in place to process cleared auction trades, a clearing procedure which ICE will be introducing to the auction. Two other commodity trading companies INTL FCStone and Jane Street, will however, join the auction on 2 October. INTL FCStone and Jane Street also recently joined the LBMA Gold Price auction as direct participants.
    Beyond the continued exclusion of the vast majority of global silver participants from the auction, the very fact that a new administrator has had to be drafted in to run this LBMA Silver Price auction is itself noteworthy, as is the ultra-secretive way in which ICE has been selected as the new auction administrator.

    This post was published at Bullion Star on 28 Sep 2017.


  • Morgan Stanley CEO Rejects Dimon: “Bitcoin Is Certainly More Than A Fad”

    Two weeks after JPMorgan CEO Jamie Dimon’s now infamous “Bitcoin is a fraud” comments, Morgan Stanley CEO James Gorman told The Wall Street Journal today that Dimon is wrong and “Bitcoin is certainly more than a fad… the concept of an anonymous currency is an interesting concept.”

    This post was published at Zero Hedge on Sep 27, 2017.


  • BUBBLE ABOUT TO BURST?

    Last month, Anti-Media reported that some of the biggest institutions on Wall Street have issued warnings to investors that planet-wide financial markets are nearing a downturn. From an August 22 article by Bloomberg:
    ‘HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle.
    ‘Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop.’

    This post was published at The Daily Sheeple on SEPTEMBER 25, 2017.


  • Wall Street Is Attempting to Clone Loyal, Non-Whistleblower Workers

    Last month, Reuters reported that Goldman Sachs was planning ‘to begin’ using personality tests to assist it in hiring personnel ‘in its banking, trading and finance and risk divisions.’
    It’s highly unlikely that Goldman Sachs is just beginning to use personality tests since other major firms on Wall Street have been using them for at least three decades – and not in a good way.
    The Reuters article was penned by Olivia Oran, who also wrote in June of 2016 that major Wall Street firms such as Goldman Sachs, Morgan Stanley, Citigroup and UBS were ‘exploring the use of artificial intelligence software to judge applicants on traits – such as teamwork, curiosity and grit.’ The article further noted that one of the goals of the artificial intelligence software is to ‘avoid the expense of problem hires and turnover…’
    All of the firms mentioned have experienced employees that, in their view, were ‘problem hires.’ The public, however, has viewed those same employees as public interest-motivated whistleblowers.

    This post was published at Wall Street On Parade on September 12, 2017.


  • British People Suddenly Stopped Buying Cars

    – British people suddenly stopped buying cars
    – Massive debt including car loans, very low household savings
    – Brexit and decline in sterling and consumer confidence impacts
    – New cars being bought on PCP by people who could not normally afford them
    – UK car business has ‘exactly the same problems’ as the mortgage market 10 years ago, according to Morgan Stanley
    – Bank of England is investigating to make sure UK banks are not overly exposed…
    – Prudent British people buying gold with cash, not cars with debt
    by Jim Edwards, Business Insider UK
    ***
    British people have suddenly stopped buying cars.
    It’s not clear why. But a number of anti-car trends have hit Britain simultaneously – such as the rise of Uber and a decline in household savings – driving down car sales.
    The chart above of total car sales both old and new, from Barclays, says it all. On this chart, the grey-black line is the crucial one. The blue line (online sales) represents only a small number of purchases. Barclays

    This post was published at Gold Core on September 12, 2017.