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Posts tagged ‘Morgan Stanley’

At $72.8 Trillion, Presenting The Bank With The Biggest Derivative Exposure In The World (Hint: Not JPMorgan)

by Tyler Durden

Moments ago the market jeered the announcement of DB’s 10% equity dilution, promptly followed by cheering its early earnings announcement which was a “beat” on the topline, despite some weakness in sales and trading and an increase in bad debt provisions (which at €354MM on total loans of €399.9 BN net of a tiny €4.863 BN in loan loss allowance will have to go higher. Much higher). Ironically both events are complete noise in the grand scheme of things. Because something far more interesting can be found on page 87 of the company’s 2012 financial report.

The thing in question is the company’s self-reported total gross notional derivative exposure.

And while the vast majority of readers may be left with the impression that JPMorgan’s mindboggling $69.5 trillion in gross notional derivative exposure as of Q4 2012 may be the largest in the world, they would be surprised to learn that that is not the case. In fact, the bank with the single largest derivative exposure is not located in the US at all, but in the heart of Europe, and its name, as some may have guessed by now, is Deutsche Bank.

The amount in question? €55,605,039,000,000. Which, converted into USD at the current EURUSD exchange rate amounts to $72,842,601,090,000….  Or roughly $2 trillion more than JPMorgan’s.


full article at source:http://www.zerohedge.com/news/2013-04-29/728-trillion-presenting-bank-biggest-derivative-exposure-world-hint-not-jpmorgan

Billion-Trillion Derivatives Market! … Reform or a Blowup?

Derivatives Reform on the Ropes …


 New rules to regulate derivatives, adopted last week by the Commodity Futures Trading Commission, are a victory for Wall Street and a setback for financial reform. They may also signal worse things to come … The regulations, required under the Dodd-Frank reform law, are intended to impose transparency and competition on the notoriously opaque multitrillion-dollar market for derivatives, which is dominated by five banks: JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup and Morgan Stanley. – New York Times


Dominant Social Theme: We have this billion trillion market under control. Don’t worry.

Free-Market Analysis: Derivatives reform? We hardly think so …

First of all, nobody knows how big the derivatives market is and no one knows how many dollars are at risk. Those involved in making the regulations are also the largest players in the market. Whatever “reform” is being worked out will benefit those who are part of the industry.


Here’s how Wikipedia describes a derivative:

A derivative is a financial instrument which derives its value from the value of underlying entities such as an asset, index, or interest rate–it has no intrinsic value in itself. Derivative transactions include a variety of financial contracts, including structured debt obligations and deposits, swaps, futures, options, caps, floors, collars, forwards, and various combinations of these…………………………..

full article at source: http://www.thedailybell.com/30657/Billion-Trillion-Derivatives-Market–Reform-or-a-Blowup

U.S. Bond Market, The Greatest Hoax Ever Perpetrated on Mankind

By: Rob_Kirby

A few years ago, when J.P. Morgan grew their derivatives  book by 12  Trillion in one quarter[Q3/07] – I did some  back of the napkin math – and figured out how many 5 and 10 year bonds the  Morgue would have necessarily had to transact on their swaps alone – if they  are hedged.  The bonds required to hedge the growth in Morgan’s Swap book were 1.4 billion more in one day than what was mathematically available to the entire domestic bond market for a whole quarter?

Put simply, interest  rate swaps create more settlement demand for bonds than the U.S. issues.

This is why U.S.  bonds “appear” to be “scarce” – which the bought-and-paid-for mainstream  financial press explains to us is “a flight to quality”.  Better stated, it’s a “FORCED FLIGHT [or  sleight, perhaps?] TO FRAUD”.

Assertions that netting “explains” this incongruity are a NON-STARTER.   Netting generally occurs at day’s end – the math simply does not even  work intra-day.

Further  Evidence of Gross Malfeasance in the U.S. Bond Market

Back in 2008, at the height of the financial  crisis, folks are reminded how the Fed and U.S. Treasury were unsuccessful in  finding a financial institution to either acquire or merge with Morgan Stanley.  Unfortunately, Morgan Stanley’s financial  condition has continued to deteriorate:

Analysis: How Morgan Stanley sank to junk pricing

REUTERS | June 1, 2012 at 5:45 pm |

(Reuters) – The bond markets are treating Morgan Stanley like a  junk-rated company, and the investment bank’s higher borrowing costs could  already be putting it at a disadvantage even before an expected ratings  downgrade this month.

Bond rating agency Moody’s Investors Service has said it may cut  Morgan Stanley by at least two notches in June, to just two or three steps  above junk status. Many investors see such a cut as all but certain

full article at source: http://www.marketoracle.co.uk/Article35164.html

Greek Euro Exit By Numbers (UPDATE )

By Laura Clarke and Katie Martin

(Dow Jones)

The prospect of Greece leaving the euro is the only thing anyone is talking about in the markets at the moment. It even has its own nickname: Grexit.

While the world holds its breath for the next Greek elections or major policy announcement, speculation of an exit runs rife.

It is important to emphasize that nothing is certain here; Greece may or may not leave, and there’s a huge range of potential policy responses. So, making allowances for some guesswork, from U.S. political upheaval to a knock-on effect for Mexican bonds, here’s a rundown of the latest on some economists’ and analysts’ views on what could happen next.MORGAN STANLEY: The bank echoes calls for a sufficient firewall to prevent a spillover into other peripheral markets in the event of a Greek exit, also saying the structure of this firewall will determine the medium-term direction of the euro. “The firewall is unlikely to receive much in the way of additional fiscal support, as local budgets of most European Monetary Union members are stretched, suggesting the European Central Bank will play a vital role in strengthening the firewall. However, the more the ECB gets involved in helping to create a sufficient firewall, the weaker the euro. A Greek exit will also create bearish economic second-round effects, which will be felt by core countries via weakening export dynamics too,” Morgan Stanley analysts say.

full article at source:  http://online.wsj.com/article/BT-CO-20120525-708442.html


by Golem XIV

A horrid thought has been incubating for the last few days.

I don’t know how many of you know much about Vulture Funds, what they do and how they do it, but it forms the basis of my horrid thought.

Nations issue debt. After it is bought, it often gets re-sold on what is called the secondary market. The price of debt on the secondary market changes much as stock prices change. The market is big.

When a nation looks like it might default the price of its debt begins to sink. What was bought for full price is offered for sale at a reduced price – say 60 cents on the dollar. Buyers and sellers have to decide if they think the nation will proceed to default or avoid it. The decision is, sell now and accept a loss but avoid a potentially larger loss later, or buy now at a discount and if the nation avoids default, profit as the value of that cheaply bought debt recovers its original value.

But then there are the vulture funds. They follow a quite different path. They are creatures of the law not of finance and there are not many. One of the biggest, most notorious and best connected is Elliot Associates of Manhattan. They have very close links with the Republican Party and to Mitt Romney in particular ( They are large donors to his campaign). Another is FG Capital management. These companies are financial companies all founded and largely owned by Wall Street  lawyers. FG Capital Management was founded by a former Morgan Stanley consultant.

Vulture funds buy the bonds others have given up on. They buy what is often referred to as ‘distressed debt’. That is debt that has been defaulted upon and is, for the ordinary bond manager, worthless. The vulture buys it and then sues the defaulting nation. It is a very specialized area of the law and of finance. As an IMF study from 2003 said of vulture funds,

“Investors in this market posses specialized knowledge of bankruptcy law and international litigation and are willing to hold out for many years before seeing any recovery”

full article at source: http://www.golemxiv.co.uk/author/golem-xiv/

Banking Elites Stole $1.2 Trillion Thanks to the FED

DB Briefs: Banking Elites Stole $1.2 Trillion Thanks to the FED / Is Ben Bernanke Insane? / Biden Tells China “You Are Safe”

Tuesday, August 23, 2011 – by Staff Report

Wall Street Aristocracy Got $1.2 Trillion from the FED

Fed Chairman Ben S. Bernanke‘s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. … according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress. “These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.” – Bloomberg

full story at source:http://www.thedailybell.com/2835/DB-Briefs-Banking-Elites-Stole-12-Trillion-Thanks-to-the-FED-Is-Ben-Bernanke-Insane-Biden-Tells-China-You-Are-Safe

“ECB is happy to let Irish banks go”


Image via Wikipedia


By David Mc Williams

David has a new posting and it is well worth a read!

Did you know that AIB defaulted on Monday? It did, and the people who internationally govern this type of thing announced yesterday that AIB is technically in default. AIB decided — rightly — not to pay some of its many billions of bonds. It began the process of burning the bondholders. Now, were we not told that if the banks defaulted then the sky would fall in? Wasn’t that the establishment line?
It’s not me who says AIB has defaulted, it is the following list of banks: Bank of America/Merrill Lynch; Barclays, Credit Suisse; Deutsche Bank; AG Goldman Sachs; JPMorgan Chase Bank; NA Morgan Stanley; UBS; BNP Paribas; Societe Generale; Citadel Investment Group LLC; DE Shaw Group; BlackRock; BlueMountain Capital and Rabobank International.
All these international investment banks that make up an august body called the International Swaps and Derivatives Association deemed officially that AIB has defaulted.
Now I don’t really care what happens to these bankers, but I do remember that they had said that if AIB or any of the Irish banks defaulted on anything, the world would cave in. So has it? Weren’t you told that by now the ATMs would not have any money in them?
Yesterday morning, I approached an ATM in Dalkey at the local AIB expecting to see lines and lines of frantic depositor’s queuing up to get their money out.
I was terrified as I put in my card because these usual suspects who come on telly and sound as if they know something warned that at the first hint of a default there would be no money in the hole in the wall. Now granted, these were the same lads who said we’d have a soft landing and who reassured us that the banks were “well capitalised”.

read full article at source : http://www.davidmcwilliams.ie/2011/06/22/ecb-is-happy-to-let-irish-banks-go-bust-by-stealth

Fed Staffers ‘Embedded’ at Nation’s Biggest Banks

The Regulator Down the Hall … Fed and Comptroller of Currency Bolster the Ranks of Staffers ‘Embedded’ at Nation’s Biggest Banks … Memo to employees at big Wall Street banks and securities firms: Be careful what you say on the elevator. You might be surrounded by regulators. As part of a push to prevent another financial crisis, the Federal Reserve Bank of New York and the Office of the Comptroller of the Currency are increasing the number of examiners who go to work every day at the companies they regulate. Much like reporters assigned to a military unit during war, these regulatory “embeds” get unprecedented access to financial firms such as Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley. – Wall Street Journal

Dominant Social Theme: Regulators always get it right.

Free-Market Analysis: Is there any justification for this? The dominant social theme “embedded” in the above article is clear: More efficient regulatory endeavors will reduce the kind of financial crises that have been prevalent throughout the history of modern capitalism. Only more and better government regulation is the answer.

Of course, the regulatory answer to big businesses excesses has not worked in the past and there is no reason why it will work in the future. Every regulation is actually a price fix that further distorts the marketplace and transfers wealth from producers to those who do not know how to produce. Nonetheless, this dominant social theme rolls on. Every time there is a financial setback, the US government and its adjunct enforcer the central bank (Federal Reserve) gains more power. This goes for the rest of the Western world, too.

full article at source: http://www.thedailybell.com/2526/Staff-Report-Federal-Reserve-Embeds-Employees-in-Banks


The Fed will need to take steps and make sure that these watchdogs do not go native as is the case of the public directors that were placed on the Irish bank boards .The bank directors and top managers have enjoyed bonus payouts while the banks have
pleaded inability to pay and demanded pay cuts and job losses from their staff.
The same public directors have remained quiet about the bonus accesses and seemed
to be no different that the people they were supposed to be watching

LinkedIn shares skyrocket after IPO

By John Letzing, MarketWatch

SAN FRANCISCO (MarketWatch) — LinkedIn Corp.’s dramatic first-day splash on the public markets Thursday presented private exchanges, which have been offering investors pre-IPO access to shares in the professional networking site, an opportunity to strut.

“We feel pretty good today,” said Jeremy Smith, chief strategy officer at SecondMarket, a platform that’s been connecting buyers and sellers of private-company shares since 2008. Smith called LinkedIn’s initial public offering “a pretty good validation of the secondary market.”

Shares of LinkedIn /quotes/comstock/13*!lnkd/quotes/nls/lnkd LNKD -8.92%  had been priced at $14.50 a share on SecondMarket in April of last year, rising to $25 a share by December, and reaching $35 by March of this year. Initially priced at $45, shares of LinkedIn jumped to $94.25 by the close of their first day of trading on the New York Stock Exchange.

LinkedIn shares skyrocked on their first day of trading, soaring as high as $122 and closing at $94, more than double its $45 IPO price.

Yet many of the early buyers who snapped up shares of LinkedIn at low prices before they hit the public markets will not be able to cash in any time soon. That’s because the shares they acquired from company employees or founders via SecondMarket or similar services such as SharesPost are subject to lock-up periods, which generally restrict their sale for a period of about six months after a company goes public.

“When you buy over SecondMarket, you become a shareholder like any other, so you’re treated like any other, and, as with most IPOs, most every shareholder is subject to a lock-up agreement,” said SecondMarket’s Smith.

A LinkedIn representative declined to comment, apart from referring to the company’s IPO registration filing.

Left out of LinkedIn IPO?     Lucky for you: Without inside connections, IPOs for social-networking firms like LinkedIn can be perilous to small investors, says Chuck Jaffe.

In that filing, Mountain View, Calif.–based LinkedIn said, “All of our directors and executive officers and the holders of substantially all of our securities have signed lock-up agreements, under which they have agreed not to sell, transfer or dispose of, directly or indirectly, any shares of our common stock … without the prior written consent of Morgan Stanley & Co. Incorporated for a period of 180 days … after the date of this prospectus.”

Morgan Stanley /quotes/comstock/13*!ms/quotes/nls/ms MS +0.32%  was the offering’s lead underwriter.

David Weir, chief executive at SharesPost, a platform for private-share buyers and sellers founded in 2009, said an auction of LinkedIn shares in January involved over 95,000 shares at a closing price of $30.79.

The monthly value of LinkedIn rose to $2.8 billion in March of this year, compared with $1.5 billion the previous April, according to SharesPost data. Public investors had set a value of $8.5 billion on LinkedIn by the close of trading Thursday.


Source: http://www.marketwatch.com/story/private-exchanges-take-linkedin-victory-lap-2011-05-19?link=kiosk#


Well we have arrived again at a new dot bomb bubble ,There is no way this stock  is worth this price and I have absolute faith I will be getting the opportunity to get back all of my pension money the crooks in the Irish Banks gambled away  from me.

Why has ECB raised its main interest rate from 1% to 1.25% today?

April 7, 2011

As expected it has just been confirmed that the ECB is raising its main refinancing operations rate from an historic low of 1%, where it has rested for the past 23 months since May 2009, to 1.25%. The general betting is that further rate rises will be implemented in the coming months. Why? Although it mightn’t feel like it in Ireland, or indeed Greece or Portugal, Europe on an aggregate basis is recovering from the 2007-8 financial crisis. This is what the February 2011 European Commission forecast was for the main EU economies.

Whilst our GDP in Ireland fell by 1% last year – making it three successive years of drops totalling 12% off peak GDP in 2007 – Germany’s economy roared ahead with GDP growth of 3.6% in 2010. Our government might officially say the outlook is for 1.75% GDP growth in 2011, but the EU thinks it will be 0.9% and even the upbeat Morgan Stanley-produced “Ireland – a Time to Buy” analyst note on Monday this week anticipates GDP growth in 2011 of just 0.8%. Mind you, our inflation has been picking up in recent months but is still just 0.9% in February 2011, the lowest in Europe (that is, using the inflation measure which excludes mortgage interest – factor that in and even we were at 2.2%).

So the reason the ECB is raising rates now is to cater to the bigger economies in Europe, and that’s how the euro works. Arguably we are in the present state of distress because of the application of the same principle in the early 2000s when Germany was experiencing sluggish growth and Ireland was continuing to experience Celtic Tiger growth in GDP and inflation. If we had our own currency, there might have been a better chance of increasing interest rates to cool demand but because we were out of sync with Germany, that didn’t happen. Of course we have benefited from membership of a common currency in the sense that our old currency, the punt, was hardly seen as a significant currency and we have cut down exchange rate risks and cost. And political controls might have been exerted in the 2000s to curb the growth in credit. Still, on days like this, you would wonder if the bargain to join the euro was worth it.

Ireland has 785,000-odd mortgages of which an estimated 400,000 are tracker mortgages so today’s announcement will have an almost immediate and widespread effect. If your tracker is ECB + 1.5%, then on a €250,000 mortgage, your repayments, simply calculated, are likely to increase by €50 per month (€250,000/12 * [2.75%-2.5%]). Minister for Finance, Michael Noonan will no longer be able to comfort us with the mantra about the ECB providing €100bn liquidity to our banks at 1%. The prospect of even higher interest rates in the EuroZone will also tend to strengthen the euro with sterling (at 0.874 this morning), and the UK is our main trading partner.

full article at :http://namawinelake.wordpress.com/2011/04/07/why-has-ecb-raised-its-main-interest-rate-from-1-to-1-25-today/


Well if we needed another example of whom really the ECB is working for .

We in Ireland need this interest rate rise like a hole in the head, what utter nonsense. This rate rise is stupid it is pushing up the euro in value and soon we should see the euro /Dollar at 1.50 and even beyond. Have these guys a death wish? Maybe the Germans want the euro to collapse. It is hard to see what the big picture here is with the events in Portugal now showing the truth about the banking problem all around Europe I wonder if the Germans are creating the justification they will need to walk away from the Euro Experiment. This has dealt a death blow to the recovering property market here in Ireland  and it only confirms that we are about to see the next leg down ,hold on to your hats a storm is about to hit us real hard!

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