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Egan-Jones Downgrades Morgan Stanley From A+ To A, Negative Outlook

Tyler Durden's picture




 

It never rains, but it pours. From Egan-Jones:

Morgan Stanley: EJR lowered A+ to A (Neg.) (S&P: A) (MS)

 

Synopsis: Questions about MS's French bank exposure and level of derivatives exposure. While June results were good, MS' French bank exposure (all asset and off balance sheet classes except derivatives) is estimated at $39B (57% of equity of $68B and 150% of market cap of $26B) of which interbank placements is believed to be a small component. These exposures are significant and unusually large as a percentage of capital. Of equal concern is the estimated $1.78T in notional value of CDS' on MS' books although EJR does acknowledge the netting effect (the net estimated exposure is $457M). The US is likely to provide MS additional support if needed, despite wind-down procedures contained in Dodd Frank. We are downgrading with a neg outlook.

Next stop for Morgan Stanley (after a failed promotional media campaign including Dick Bove, Jim Cramer, Wells Fargo, Credit Suisse, Alliance Bernstein and Mistubishi UFJ): Discount Window?

 

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Tue, 10/04/2011 - 08:38 | 1736561 GeneMarchbanks
GeneMarchbanks's picture

When you're climbing up a mountain and you squirt a chocolate fountain...DIARRHEA!

Tue, 10/04/2011 - 08:38 | 1736563 Al Huxley
Al Huxley's picture

They're going to look pretty foolish when the company they just downgraded to 'A' (WTF!) follows Lehman and Bear Stearns into oblivion.

Tue, 10/04/2011 - 08:40 | 1736569 mayhem_korner
mayhem_korner's picture

A is the new CCC

Tue, 10/04/2011 - 08:46 | 1736587 Yamaha
Yamaha's picture

Mayhem - your correct. People only lose money with good investment rated companies -Lehman, Worldcom, AAA mortgages.......

Tue, 10/04/2011 - 08:38 | 1736564 knukles
knukles's picture

Talk about downgrades. 
If Moody's dings he US for it's political drama, Kafkesque Theater of the Absurd let alone deteriorating financials, why have they not yet taken the Whole of the EU out to the Shitter and Flayed Them Alive?
Got Principles?

Tue, 10/04/2011 - 08:46 | 1736586 Snidley Whipsnae
Snidley Whipsnae's picture

If you live 'over there' you hear about the mess here...

If you live 'here' you hear about the mess over there...

Propaganda... it's whats for dinner...

Tue, 10/04/2011 - 08:56 | 1736622 LawsofPhysics
LawsofPhysics's picture

Indeed, but I would say the dinner soup is now meatless.  No protein what so ever.

Tue, 10/04/2011 - 09:41 | 1736776 knukles
knukles's picture

Oh yes, while living in Europe (enjoyable ex-pat experience) after many years that became ever so obvious.  Cultural institutioanlized Dialectic on both sides of the equation, world wide. 
Light the neighbor's house on fire, we need a diversion men! See, it's not our fault!  The grass ia aways worse on the other side, be glad you're here!

Tue, 10/04/2011 - 08:39 | 1736565 mayhem_korner
mayhem_korner's picture

 

 

Wonder if Bin Bernanke (credit WB7) is getting a manicure to pretty up his trigger fingers...

Tue, 10/04/2011 - 08:39 | 1736567 Moneyswirth
Moneyswirth's picture

The US is likely to provide MS additional support if needed, despite wind-down procedures contained in Dodd Frank. 

 

Thank god the pols got back at those greedy ATM users huh?  Bunch of slackers...

Not only are the markets broken, but our government is FUBAR.

Welcome to the Command Economy Comrade Bitchez!

Tue, 10/04/2011 - 08:41 | 1736574 ivars
ivars's picture

it had to be, and it was expected by many that after QE2 stocks will tank. Zerohedge was one of the first to note it. Now they are doing it, e.g. compare to the chart I made in February 6th 2011:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=0#p30485

What follows is relatively slow, but accelerated tanking till approx DJIA 7000 in March 2012. After that, a bump up, either in expecations of USD devaluation ( not to be materialized though), or just a normal reaction to oversell- post oversell ( inverse peak crach ) rebound. Than down again, and so on during 2012-2013 ( here is longer prediction chart, made in April 2011):

This one says DJIA will reach even 6000 briefly in early 2013.

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&start=180#p31988

I have even longer prediction up to 2014 which I have not published yet- it does not look much better, in general, still below 8000.

Tue, 10/04/2011 - 08:49 | 1736598 Ruffcut
Ruffcut's picture

"prediction up to 2014"

Take your crystal ball and shove it back up your ass, where it belongs.

Tue, 10/04/2011 - 08:53 | 1736602 Global Hunter
Global Hunter's picture

my chart with the money printing variable on full blast shows stocks going higher long term...see Zimbabwe Industrial Index chart from 2000-2009 for an illustration.

 

 

 

Tue, 10/04/2011 - 08:41 | 1736576 doomandbloom
doomandbloom's picture

Egad!

Tue, 10/04/2011 - 08:41 | 1736577 EscapeKey
EscapeKey's picture

No doubt GS will upgrade MS later today.

Tue, 10/04/2011 - 08:49 | 1736595 Josh Randall
Josh Randall's picture

Correct - there will be some kind of mutual admiration society out of this where all these albatross justify throwing their client's money at each other as though nothing is wrong.

Tue, 10/04/2011 - 09:15 | 1736666 fuu
fuu's picture

If only to get short vs retail.

Tue, 10/04/2011 - 08:41 | 1736578 stacking12321
stacking12321's picture

"Morgan Stanley: EJR lowered A+ to A"

an A? well that's not so bad...that's better than 90% of the rest of the class.

Tue, 10/04/2011 - 08:49 | 1736596 Snidley Whipsnae
Snidley Whipsnae's picture

All the ratings agencies are grading on the curve...

If not, how could a bk US be anything but an F- ???

Tue, 10/04/2011 - 08:47 | 1736589 Josh Randall
Josh Randall's picture

COOL ! Just like the Fonz man...Morgan Stanley: AAAAAAAAAAAAaaaaaaaaaaaaaaaaaaaaa!

Tue, 10/04/2011 - 08:48 | 1736593 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

I guess the thing about being a ratings agency is that financial accounting is so complicated that if you want to give a positive rating, you can always find an excuse buried somewhere in the avalance of data.

 

Conversely, once the agencies turn and *want* to give negative ratings, they don't even have to work as hard as they do above.

Tue, 10/04/2011 - 08:49 | 1736597 buzzsaw99
buzzsaw99's picture

MS loses money the old fashioned way.

Tue, 10/04/2011 - 09:01 | 1736632 LawsofPhysics
LawsofPhysics's picture

The Chinese people, much like the American people or people in any other country, know what they need to survive.  Only the politicians as puppets for the global banking cartel are "threatening", and proposing "war".  Personally I am looking forward to the return of sound money and the declaration of outright war as I am confident no one will show up for it.  At that point we can put all the dishonest bankers, financial shills, and politicians on an island with live T.V. coverage, simply so we can still watch the kabuki theater now and again.

Tue, 10/04/2011 - 08:55 | 1736619 overmedicatedun...
overmedicatedundersexed's picture

Tvix, faz, rocking this AM..NLY not so much..got dividends??

Ben needs to soothe the markets with his Q&A today..somehow I think another epic fail..and it's FAZ to da moon.

Is this the beginning of the END?? march on the FED coming soon the pols know which way the wind blows.

Tue, 10/04/2011 - 08:59 | 1736629 oogs66
oogs66's picture

S&P should be out soon with some downgrades

Tue, 10/04/2011 - 08:59 | 1736630 unununium
unununium's picture

Maybe JPM takes out MS, the house of Morgan is reunited and ready to dominate the world.

Tue, 10/04/2011 - 09:11 | 1736649 overmedicatedun...
overmedicatedundersexed's picture

..PM's will rocket as this game has been seen before. It's double down time and spin that wheel.. this time it's gotta hit red. we are soooo close to the final implosion do the rest of you feel it coming like a jet black iron ball thru the dark night?

Tue, 10/04/2011 - 12:56 | 1737671 r101958
r101958's picture

...and at 1pm MS stock is UP 1% on downgrade news. Got to love the rationale of this 'market'.

Wed, 10/12/2011 - 12:28 | 1766168 karmete
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