Morgan Stanley On Stress Tests: "Lots Of Missed Opportunities"

Morgan's Huw van Steenis shares his team's view on the "stress test" catalyst that is supposed to finally put ever-bullish MS in the money, and diffuse the pent up rage of its client base for losing it billions with all those short bond recommendations. The MS report has some quite objective observations: "Given the size of the fiscal and banking sector problems in Europe and elsewhere, a quick and easy solution is unlikely. However, we think a circuit breaker, such as a restructuring and recapitalisation of the banking system, is needed because unlimited liquidity provision by the ECB does not get to the root of the problem. In our view, for the recovery to get onto solid ground both financial and fiscal stability need to be restored equally. The sovereign debt crisis has shown how closely intertwined financial and fiscal stability are. In our view, Europe has been making good progress in mapping out how it intends to restore sustainable budget positions. But there are still concerns amongst investors about financial stability. In this context the stress test is key." Yet unfortunately, as expected, the conclusions are that all is well, despite the test obtaining largely different and far stronger conclusions than even MS' internal pre-testing setup. Nonetheless, a good one document summary of all the findings of the test together with some in depth commentary for those who just need that upside catalyst.

Comments

[trav7777]

Stress, bitchez

[weinerdog43]

Why in the world is any sentient being continuing to use the investment 'advice' of Morgan Stanley or any other bankster?  Seriously, if you are paying Goldy or any of these guys money, you should investigate other career options.

Sadly, I expect that among the idiots that are still listening to these crooks is my own pension fund.  I've pretty much given up any expectation that I'll receive anything close to what has been promised.  Thanks Banksters!