Unsealed Documents Expose Morgan Stanley Forcing Rating Agencies To Inflate Ratings

http://www.zerohedge.com/news/unsealed-documents-expose-morgan-stanley-forcing-rating-agencies-inflate-ratings

Facebook Bankers Secretly Cut Facebook’s Revenue Estimates In Middle Of IPO Roadshow

Hugely wrong call by Morgan Stanley exec lands him cush government post

This analyst report of Lehman Brothers in 2008 was authored by a Morgan Stanley Vice President of Equity Research at the time, Patrick Pinschmidt.  The title of the report declared, "Lehman Brothers - Bruised, Not Broken--and Poised for Profitability."

http://www.jenner.com/lehman/docs/frbny/FRBNY%20to%20Exam.%20027135-027158.pdf

Sixty days after the report was released to Morgan Stanley clients, Lehman Brothers collapsed in what was then the largest bankruptcy in US history.  Mr. Pinschmidt is now the Senior Policy Adviser at the US Treasury Department.

Patrick Pinschmidt LinkedIn profile

Morgan Stanley Deconstructs The Funding Crisis At The Heart Of The Recent Gold Sell Off, And Why The Gold Surge Can Resume

http://www.zerohedge.com/news/morgan-stanley-deconstructs-funding-crisis-heart-recent-gold-sell-and-why-surge-can-resume

Morgan Stanley: Here’s Why Gold Will Go Higher

Thanks to Dick for finding this article on Morgan Stanley's take on gold.  It looks vaguely familiar. 

http://finance.yahoo.com/news/Morgan-Stanley-Here-Why-Gold-wscheats-1236027804.html?x=0&.v=1

Bankers' wives got no-risk loans

I blogged about this earlier, on how the Fed was bailing out everybody and his brother.  Now we find out they were doling out free money to bankers' wives, Central banks of terrorist countries, foreign car manufacturers, motorcycle companies, etc.--on the backs of taxpayers.  I hope you are as outraged as I am.

Matt Taibbi Asks Why The Fed Gave $220 Million In Bailout Money To The Wives Of Two Morgan Stanley "Bigwigs"

http://www.zerohedge.com/article/matt-taibbi-asks-why-fed-gave-220-million-bailout-money-wives-two-morgan-stanley-bigwigs

Two words:  Marie Antoinette.

Morgan Stanley raises gold and silver price targets

As a contrarian, this concerns me, and I expect a temporary pullback in light of the recent surge in prices. But mid- and long-term, Morgan Stanley hits the nail on the head prognosticating the bullish case for precious metals.

http://www.zerohedge.com/article/morgan-stanley-boosts-gold-and-silver-price-target-raises-2011-upside-gold-forecast-1380-151

From Morgan Stanley's Peter Richardson, who has just become one of the bigger gold/silver/platinum/palladium/platinum/rhodium bulls.

* Identified and implied investment demand has increasingly become the main driver of demand in the gold market. Since 2002, investment demand as a percentage of total demand has increased from 14% to 41.4% in 2009. We expect these percentages to rise further, to 46.9% in 2010 and 48.9% in 2011. In Q2 2010 alone, investors bought 274t of gold via exchange traded funds (ETFs).
* This development is predominantly a measure of fear regarding the purchasing power of the world’s major fiat currencies, especially the US dollar and the Japanese yen. In our view, investors have become increasingly concerned about the risk of a protracted period of deflation and low growth in the developed world. This has raised demand for investments that retain real purchasing power in a period of falling prices and weak demand.
* However, judging by the flood of money into inflation-adjusted government bonds as well as gold, investors are also worried about future inflation. This paradoxical fear of current deflation and future inflation has its roots in the anticipated policy response to the current US, Japanese and European growth environment. Most notably, gold investors are concerned about renewed quantitative easing (QE) and an anticipated expansion in liquidity and currency devaluation that is also viewed as potentially inflationary, fuelling the demand for real assets that preserve purchasing power.
* Gold has been a particular beneficiary of this safe-haven demand since the US FOMC alluded to the possibility of renewed QE in the minutes of its September 2010 meeting. However, this allusion also coincided with resurgent fears over the European sovereign debt crisis following news of higher bank bailout costs in Ireland, rating downgrades in Spain, and concerns regarding capital adequacy of European banks following the publication of Basel III guidelines.
* In addition, despite these resurgent fears over European sovereign debt and the health of some European banks, European central bank net sales of gold actually fell in the first year of the third Central Bank Agreement on Gold, to only 6.2t. Given purchases by non-European central banks, the official sector is likely to be a net buyer of gold in 2010, and net selling will probably be smaller than previously anticipated.
* As a result, we have raised our 2011 gold price forecast in our base case by 14.3%, to an average US$1,315/oz, and in our bull case, which anticipates a more aggressive level of dollar weakness and a protracted period of negative real interest rates, we have raised our price forecast to US$1,512/oz from US$1,380/oz.

Hee Haw

Barton Biggs recommends moving to the country, buying some seed, growing your own food, and buying some ammo. Barton Biggs is not a wild-eyed survivalist, but he's starting to sound like one. He has an impressive track record for financial forecasts as a former Morgan Stanley chief economist.

http://www.gurufocus.com/news.php?id=79027

John Mack, outgoing CEO of Morgan Stanley

Warning: language inappropriate for children under age 18.

Upstairs, Mack was on the phone with Mitsubishi’s chief executive, Nobuo Kuroyanagi, and a translator trying to nail down the letter of intent.

His assistant interrupted him, whispering, “Tim Geithner is on the phone—he has to talk to you.”

Cupping the receiver, Mack said, “Tell him I can’t speak now. I’ll call him back.”

Five minutes later, Paulson called. “I can’t. I’m on with the Japanese. I’ll call him when I’m off,” he told his assistant.

Two minutes later, Geithner was back on the line. “He says he has to talk to you and it’s important,” Mack’s assistant reported helplessly.

Mack was minutes away from reaching an agreement. He looked at Ji-Yeun Lee, who was standing in his office helping with the deal, and told her, “Cover your ears.”

“Tell him to get fucked,” Mack said of Geithner. “I’m trying to save my firm.”

- excerpt from "Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves" by Andrew Ross Sorkin

I'm going to guess Mack's assistant didn't relay the message to Turbo Tax Timmy.

I'm out of MS for a tidy profit

Morgan Stanley shares were actually up over 80% at the end of the trading day yesterday, and were up big again today, as a certain Japanese bank thinks they're worth $25. I got the cue, hit my target, and sold for a 100% gain in less than a week. I am normally not a trader, but this one was too sweet to pass up.

I'll stick with my INTC position and scour for companies with dominant market share, plenty of cash, and a solid balance sheet. The market still has a lot of pain to endure over the next couple years, but there are bargains out there if you are looking for long-term value.

Good huntin'.

I screwed up...

I violated my rule of not trying to catch a falling knife, and nibbled at shares of Morgan Stanley--I'm down 25% in ONE day, and was actually down even further intraday. Of course, MS is already down over 90%, so at least I avoided the majority of the decline.

I also nibbled on INTC, and am down 10%--still manageable, as this will be a long-term play--INTC has plenty of cash, market share, and a competitive advantage in their manufacturing processes, which gives them pricing power. Hence, they are killing their only remaining viable competitor, AMD, which announced they are pursuing the fabless model. Going fabless frees up cash (a state of the art fab costs up to $4 billion these days), enables agility in fast-moving markets, but you lose control over your manufacturing process, and your variable costs can spiral out of control, especially during allocation (tight supply).

INTC will test their 52-week highs within a year. I really should have stuck to what I know--semiconductors, vs. credit default swaps (I'm not sure anyone understands how to value cds's--which is exactly why we're in the mess we're in).

Lesson learned.