Morgan Stanley Follows Goldman, Downgrades Economy

Tyler Durden's picture

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
CPL's picture

Unless they were hammering the sell button, meh.


Give it a month.

penisouraus erecti's picture

a well oiled propaganda machine is something to behold


augie's picture

I am only a novice but this seem strange to me. How can CPI, and consumer price index ex food/energy both be the same 2.1 in 2012?


FunkyMonkeyBoy's picture

Can we just get one thing clear before i go insane:

QE1, QE2, QE Lite, QE 33 1/3, QE Sugar free...

... all of these have not helped the 'economy'. So, er, why is everyone worrying whether QE3 will happen soon or not, like it's the be all and end all of things?

Don't need to answer, i know already, it's all a scam. Just wanted to get it down in writing to clarify my sanity on the ginormous financial scam (maybe someone 50 years in the future will find this post and say "hey, at least one guy could see what was going on back then").

mynhair's picture

Gonna answer anyway, attitudes.

Thank God Comcast dumped Erin Blownette.

augie's picture



hopefully she'll develop a drug habit and start doing porn.

Cleanclog's picture

Wall Street Investment Bank analysts and forecasters are just behind Credit rating companies in the biggest-putzes-in-the-markets contest. Positions #2 and #!

And that includes retail investors, gold bugs, PIMCO and MariaB.

CPL's picture

Looks like they won't be able to attempt to keep the price of a dwindling commodity down.  Maybe with MENA going up the river, Libya on fire, UAE in trouble as of last night, Egypt is sabre rattling again and the Afganistan offensive collapsing (turns off the oil to europe unless Russia has some soldiers not dying of drink).

I think MS and Goldman are in their right minds.  They are just off by a couple of years.  By friday we'll be seeing MS and GS trading their bonds and trust with the same appeal of used toliet paper.


Roy Bush's picture

The bottom line is that the exit sequencing timetable that we have been highlighting for a while still seems quite reasonable. We continue to look for the Fed to stop buying in June, stop reinvesting in August or September, start draining sometime in Q4, and hike the interest rate on reserves (IOR) in early 2012.


HA HA HA HA HA!!!!  SUUUUUUUUURRRRREEEEE! QE to infinity and beyond!

plocequ1's picture

Who's baby is that?  Whats your angle? I'll buy that.

Fiat Money's picture

pretty simple:  The MORE MONEY YOU GIVE to [failed, bankrupt, fraudulent, insolvent, con-gress bribing] banksters... the MORE YOUR ECONOMY CONTRACTS.    The reason is simple:  the more money the banksters get,   the more they can use to go on an ASSET BUYING SPREE, and EXTORT high "profits" from necessary, limited supply consumables they have CORNERED THE MARKETS with.  

   This above follows very simply from a concept that should be familiar to any first year college finance student: "MARGIN" (or "percentage" or "ratio," etc.)

  IF  the banksters are collecting a BIG PROFIT MARGIN from government "stimulus" spending...  then that "profit" margin is COMING DIRECTLY from _real_  ECONOMIC ACTIVITY that is NOT being purchased.     

   "Keynsian economics" was NOT  vindicated (entirely) by Roosevelt's NEW DEAL (which was run by, hello? GOLD CONFISCATING Treasury Secretary HENRY MORGANTHAU, and FDR's lead economics 'advisor' was uber-connected,  uber-conservative NY/Wall St. banker/finacier Bernard Baruch) 

  No, it was the EXPLOSION in WWII wartime economic & industrial production which vindicated Keynes.

  There was NO "overnight magic pot of gold" to FINANCE the war effort on June 8, 1941 (the day after Pearl Harbor brought US actively into the war)... no,  Uncle Sam had to SELL WAR BONDS (= DEBT, = DEFICIT SPENDING) to keep his armies, navies, & air fleets equipped, manned, & supplied.  

  but the KEY was, STRICT, STRICT, STRICT OVERSIGHT of  Financial Markets:  STRICT  limits on interest rates (one of the "ratios" synonymous with "margin"), and HIGH marginal TAX RATES - up to 90% for top incomes. 

   THAT's how you GROW an economy:  by reigning in the "CLEARANCES" and "ENCLOSURES" minded predatory, thieving, SABOTAGE minded  elites!    

kito's picture

come on, its not like they downgraded to 2 pct. they shaved a few bips off. hardly news

I am Jobe's picture

Ok then lets all go out and buy fucking IPADS and start eating that. Austerity measures coming sooner than later. Get ready I mean really get fucking ready. Gonna be ugly.


Another downgrade to US growth. We are adjusting our GDP growth forecast lower for the third time this year. We now look for +3.3% GDP growth over the four quarters of 2011 (versus +3.6% in our April update). Essentially, this puts us back to where we were in early December – before policymakers enacted a package of tax cuts aimed at stimulating the economy.

slewie the pi-rat's picture

"Sustaining job growth is key. Crosscurrents are also evident in the labor market. We continue to believe that the US economy is currently in the midst of a transition from a recovery driven by a short-term surge in productivity growth to a more mature expansion sustained by job creation and associated income gains."

would you like fries with that?

I am Jobe's picture

More like do want that supersized?

Iam_Silverman's picture

Sounds to me like they are pricing in the end of (visible) QE and see a smaller job pool growth.  With smaller bits of (visible) QE, the growth of government sector jobs should see smaller growth - or with luck, contraction.

TK7936's picture

So whats so bad about a 3 % Growthrate? Maybe just import less workers and it will be enough.

Hephasteus's picture

Downgraydd 2d's for a double dose of pimping.

topcallingtroll's picture

Bring back the two D's bitch.

Watsa matter? Becoming a prude?

mynhair's picture

Are you all brain dead?  You CAN eat Ipads!

Some gold rum, mint, a dash of Spitzer, and you have a Liberal Mohito.

infiniti's picture

Russell 2000 futures up 60 basis points. Move along, nothing to see here.

I am Jobe's picture

The Stock Market Crash of 2011: It’s About To Happen and You Must Read This! (NYSE: SPY)

baby_BLYTHE's picture

BUY SILVER NOW!!! Got that folks?

Do not allow these terrorist to keep winning!

After the worst recession in the history of the world, the market recovers 100% of its gains. Unbelivable. the Bernank is winning, doesn't that make you people sick!?!?

We don't have much. But we have are financial freedom with Gold + Silver.

Buy as much as you can, let us win this financial war against these terroirsts.

topcallingtroll's picture

If bernanke wins and safely guides us thru this thing that wont be all bad. A growing healthy economy would be a relief.

I get all conflicted on this collapse thingy. Yeah the bankers dancing from the lamp posts and some royalty and a few other representatives of the oligarchy joining them sounds appealing, but then we have the bad hangover for the next 15 years.

silberblick's picture

the economy will look much better after the SLA has cleaned stuff up. Watch the animation here:

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

If the real rate of price inflation is 9% or so and GDP is going up 3% doesn't that mean the economy is contracting in real terms!?   Oh, I apologize, the establishment media told us that the recovery began two years ago next month.  I forgot.


==Tuco Benedicto Pacifico Juan Maria Ramirez

tony bonn's picture

at such a torrid pace of 3.3% shouldn't we be wringing our hands over inflation and overheating by demanding that the fed tighten monetary policy? surely these green shoots have grown into weeds and threaten financial stability....

blunderdog's picture

I'm sick of all the negative perspectives, so let me just say: the blunderdog expectation has shown remarkable improvement over the past few months.  In January, I was predicting an 18% chance of Federal budgetary collapse and effective default.  Now in May, I've upgraded the expectation, and only predict a 15% chance of such a condition obtaining.

Hugely bullish.

baby_BLYTHE's picture

So stocks are insanley cheap then, correct?

slewie the pi-rat's picture

hey, b_Blythe!   saw you got jumped for the anti-bankster-in-charge-of-money comment the other nite!  anti-semitism!  i almost went for the bait, but decided to let the asshole live for a while.  LOL!

hope yer semester went well with the Jack!

one thing you said a while back, about putting your life on hold, till we get through this madness:  i want to encourage you not to put your life on hold.  i'd been back from vietNam (drafted) for abt 8 months when nixon took the US off the gold standard.  fuking insanity.  kissinger, riots, kent state, cities burning, price controls. 

i was convinced the wheels were coming off--40+ years ago!  and, they may be, now.  hell, if i could tell the future, i'd never leave the race track, right?

anyhow, it is your life, so you do as you see best, and follow your own reason, feelings, and instincts.

baby_BLYTHE's picture

Wow impressive there Slewie, thanks :)
My semester went pretty well, one more year to go!

I am still pessemstic as ever about the world economy. However, I have decided to enjoy my summer for what is worth, sold out of some of my positions (pretty decent gains for a first year trader thx to blogs like ZH and others). Going to go to Southern Asia (Myanmar, Thailand and Maylasia) this summer with some of my friends.

Zero Hedge and its wonderful contributors have really opened my eyes to vast knowledge and insight into the world. Great work Tyler and others, thanks!!!!

blunderdog's picture

Stocks cheap?  I didn't say anything like that.  But a 16% reduction in the likelihood of catastrophic collapse is really good news, you know.

Good/bad for the stock market has nothing to do with the economy, anyway.

mkkby's picture

So assuming this means GS and MS trading desks are getting very short now, with leverage, when do they drop the bottom out?  I'd like to make some $ out of this to put into PM's.

slewie the pi-rat's picture

i came back to this b/c i noticed tyler's:  (unless Saudi Arabia falls to the tsunami of "spooks on the ground" in which case all bets are off)

flip flops, everywhere, but this is food for thought. 

i've been re-reading Terrorist Hunter [2003] by anonymous  ("Rita Katz" who c0-founded the SITE intitute and now has quite a bit of online press as a poss. mossad disinfo agent)  and she gives the etymology of al-Qaeda on p. 208.

when bin laden first went into the af-paki in'79, he stayed out of the "action" for several years and lived in lahore, islamabad, and peshawar, which is not far from where he was recently 'killed'.  his mentor, dr. abdallah azzam (in '79, the 22- y.o. bin laden took the name abu-abdallah) encouraged him, in '84, to go into afghanistan.  bin laden was shocked by not only the misery of the men who were fighting the jihad against the soviets, but also by his own kind of cowardice at following his family's and brothers' wishes (they were running the business empire) and staying safe.  so, he went for it!  using his expertise in construction and wealth to build the fortified facilities for the warriors of jihad.  tunnels. hospitals, camps.  they used safe houses in pakistan to bring in recruits who wanted to fight.  they smuggled in arms through their now-famous "islamic charities" and in jaji, near the pakistani border, he had established his first training camp, called the lion's den (al-masada).

the two man began to see the islamic jihad differently, and in '85, drifted apart, with bin laden building the camp.  assam dies in a car bomb explosion in peshawar in '89, but had reconciled, it seems, with bin laden, and had come to agree with his former disciple/student, after he'd visited the now-amazing 'lion's den' and seen the way bin laden was picking the best fighters and operatives, and training them.  in '88, assam published "THe Solid Base" about al-masada, the "lion's den" and in arabic it is:  "al-Qaeda al-Saliba".  so, from working with and becoming part of the leadership of the mujahideen, bin laden's training camp and infrastructure got this tag.

i have no idea whether this is true, or not, but that's her story, and she's sticking to it!