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But total fabricated bullshit is what makes Morgan Stanley Morgan Stanley!
Early June, 2008
Are there any regulations in place that say that the banks have to show what bonds (etc.) they own? If there is/were such transparency, than MS monkeying around Level 1 -> Level 2 would not matter if we could all see the toxic assets they might own...
So, rats fleeing a sinking ship is no longer considered "activity?"
These people are damn lucky that words have no meaning, otherwise, they'd be fucked.
These are not the Level I assets you are looking for.
Comment of the day.
Ned wins a, "Timmah did my taxes, and all I got was this lousy t-shirt!"
"These are not the Level I assets you are looking for."
Morgan Stanley can go about its business.
It's all fun and games till somebody needs a bailout.
Like being caught at school with water bombs. It doesn't take much effort in hiding them in your pockets to make it look like you pissed yourself.
LOL- that's just classic...... Can't wait to see BAC come up with "Level 37".....
Yes. Very well done Tyler.
Fine post and series of posts on a complex subject. A little light does make the cockroaches scurry.
3-card Monte played on polished mahogany instead of cardboard boxes.
Not panic at all, this is petty cash for uncle Ben who will purchase the exposure at 150% par value, to give some buffer to a friendly FED Shareholder...
Looks like White Shoe stepped in Dog Dooooooooooo.......................
Tyler, I sense some frustration in your prose.
When you get to Level 5; does everything miraculously disappear?
Hey boss; we're on Level 4; only one more to go before your 9 zero bonus kicks in.
"Hey! Show us your Level III exposure"
"There has never been a Level III in this firm."
"But where have you been hiding all that toxic stuff?"
"We recycle them"
"But how can you recycle toxic waste? You can only burry it."
"This firm never had a Level III"
"OK. What about Ground Zero then?"
Same as: "Defcon Oh fuck me...."
After level 5..."They just went plaid!"
Geez, it's only $39 billion. My human burns that in a week.
Do wish he had hair....
That muskrat toupee looks quite fetching on Donald Trump.
Did anyone see Cramer dodge the question about silver on Mad Money? Someone asked what would happen if the cftc "gets their act together" with the position limits. He called chicago the "wild west." ha ha
Whorehouse on every corner? Check.
Community Bathhouse (Lake Michigan)? Check.
Rich guy from out East comes to rule the poor settlers? Check.
Every cowpoke has a gun? Oh, wait this is Chicago we're talking about.
Level 2 and level 3 asset classifications: banker bullshit.
Level 1, Level 2, Level 3 - Complete and utter bullshit fabrication.
Rules created to conceal.
Sunshine is the best disinfectant
Let the sunshine in.
is the tide going out?
Looks like it.
Make sure u have a camera to photo all the skinnydippers.
C'mon Berlusconi send a F*ck you to everything that is not Italian...you can do it.
Europe is decending into chaos....
Our bond markets have become a "SHAM". ;
All the corporate bonds held in mutual funds and ETF's across America are completely overvalued. Most bonds are priced off of a pricing grid. The MF's pay 3rd party "price fixers" to tell them the price of their bonds. Those prices have no bearing on reality.
Yet the funds use those prices from the "fixers" to determine the NAV of the MF's.
Wait until that market starts to cave.
It will implode on itself instantly when that selling starts to happen.
No offense intended, DollarDive, but it's been over 3 years since they discontinued mark-to-market.
Old news, guy......
Thats not what he is talking about.
The appraisers have their "blue book" of bond values to rip off retail and help bond mutual funds look better.
Just like the real bluebook, the true value of some of these thinly traded bonds is a lot less than the published price.
Priceless! And brilliant.
can we get a DEFCON reading on this?
Defcon: Oh, fuck me...
To clarify....Level 2 gives them the ability not to use the last quoted price as you would with a Level 1. They've basically had a (convenient) change in fair value accounting policy, I would love to see where they are marked at and what quotes/internal models they are using to value these bad boys.
"They've basically had a (convenient) change in fair value accounting policy, I would love to see where they are marked at and what quotes/internal models they are using to value these bad boys. "
This has to be the most concise and correct interpretation yet.
Thanks for clearing up the difference between Level I and Level II. Although they are allowed to "Mark to Model", exactly how they model the predicted outcome is the most important theme here. To model the end result, they need to be able to cherry pick the best return scenario based on a range in time, so changing the level makes sense.
So, Level 4 is unicorn?
...riding on moonbeams while shitting skittles.
The move to level 2 under FAS157 is inconsequential to the valuation, it is only a disclosure. If anything, it only invites more scrutiny as level one assets are generally reserved for exchange traded instruments with very active markets (the allocations between levels is somewhat subjective and differs from bank to bank). Assets in level three invite the most scrutiny as management judgement is almost exclusively relied on. I would be more worried if Euro sov debt was classified as level three when there have clearly been trades in the market place.
You are right, I think Tyler's point was they changed policy for these and no longer use direct quotes from a valuation service (i.e. Bloomberg) leaving the ability to internally model or use some form of valuation other than a direct quote. Theoretically should still be where market is quoting although who knows anymore.
Ok, maybe a stupid question but, when they say "transactions in these securities did not occur with sufficient frequency and volume to constitute an active", are they talking about their transactions or transactions in general? Is there a rule for this type of reclassification?(not that it matters anymore)
so, nobody knows?
whatev, comments just above me only serve to make me more confused. . . come on - I'm an honest poster here!
the quote you bolded left out the word "market" at the end.
They are claiming that there were not enough transactions in the market (it was illiquid or not liquid enough) to be able to establish a reliable "mark" or price to value their bonds/investments...which Tyler showed was a pile of dung.
No hard & fast rule that I am aware of to apply in terms of necessary volume and frequency to be considered "active", but generally, if you could sell your holdings without influencing supply/moving price, then I would say you have an active market & price you can use to value your holdings...
Thank you! I was just wanting to make sure I understood what level of BS I'm dealing with in this instance.
so, fast and loose as usual, near as I can tell.
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