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Morgan Stanley Strategy Slidepack
Attached is MS' most recent strategy slidepack covering European credit strategy, US rates (for those who just can't get enough of those 2s10s steepeners), credit strategy, and credit and equity derivatives. As the firm now has one the most bullish biases on Wall Street, the pack should at least provide those bearishly inclined with a sense of what not to do.
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Strategy, bitchez
Lies, Bitchez
Yes TD, this is exactly what you should not do. MS are saying buy cheap put spreads.
Max 10% pnl on your put spread wont help when the market is down 40%, which is where a deflationary sovereign debt spiral could easily put it. They admit clients are looking for hedges but then offer that nonsense. IMO the real reason is that they are pitching this is that selling the put spreads puts MS nicely long convexity, - they see crash risk and want to own the skew.
Put spreads are cheap because every smart desk has already sold them down there. Buying them from MS at these levels is one shitty deal, as GS MD's would say.