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Here We Go: Moody's Downgrade Is Out - Morgan Stanley Cut Only 2 Notches, To Face $6.8 Billion In Collateral Calls

Tyler Durden's picture




 

Here it comes:

  • MOODY'S CUTS 4 FIRMS BY 1 NOTCH
  • MOODY'S CUTS 10 FIRMS' RATINGS BY 2 NOTCHES
  • MOODY'S CUTS 1 FIRM BY 3 NOTCHES
  • MORGAN STANLEY L-T SR DEBT CUT TO Baa1 FROM A2 BY MOODY'S
  • MOODY'S CUTS MORGAN STANLEY 2 LEVELS, HAD SEEN UP TO 3
  • MORGAN STANLEY OUTLOOK NEGATIVE BY MOODY'S
  • MORGAN STANLEY S-T RATING CUT TO P-2 FROM P-1 BY MOODY'S

But the kicker:

ONLY MORGAN STANLEY, HSBC CUT LESS THAN MOODY'S ORGINAL MAXIMUM.

And there you have it - the reason for the delay were last minute negotiations, most certainly involving extensive monetary explanations, by Morgan Stanley's Gorman (potentially with Moody's investor Warren Buffett on the call) to get only a two notch downgrade. And Wall Street wins again.

Recall, from MS' 10-Q:

"In connection with certain OTC trading agreements and certain other agreements associated with the Institutional Securities business segment, the Company may be required to provide additional collateral or immediately settle any outstanding liability balances with certain counterparties in the event of a credit rating downgrade. At March 31, 2012, the following are the amounts of additional collateral, termination payments or other contractual amounts (whether in a net asset or liability position) that could be called by counterparties under the terms of such agreements in the event of a downgrade of the Company’s long-term credit rating under various scenarios: $868 million (A3 Moody’s/A- S&P); $5,177 million (Baa1 Moody’s/ BBB+ S&P); and $7,206 million (Baa2 Moody’s/BBB S&P). Also, the Company is required to pledge additional collateral to certain exchanges and clearing organizations in the event of a credit rating downgrade. At March 31, 2012, the increased collateral requirement at certain exchanges and clearing organizations under various scenarios was $160 million (A3 Moody’s/A- S&P); $1,600 million (Baa1 Moody’s/ BBB+ S&P); and $2,400 million (Baa2 Moody’s/BBB S&P)."

So instead of $9.6 billion, MS will face only $6.8 billion in collateral calls.

Still the firm is not out of the woods:

Any indications of control failures, a marked increase in risk appetite or deterioration in leverage or other capital metrics would lead to downward pressure on the ratings.

The negative outlook on the parent holding company reflects Moody’s view that government support for US bank holding company creditors is becoming less certain and less predictable, given the evolving attitude of US authorities to the resolution of large financial institutions, whereas support for creditors of operating entities remains sufficiently likely and predictable to warrant stable outlooks.

Sure enough, here is the immediately released Morgan Stanley statement. Odd that the firm knew in advance what the rating cut would be...

While Moody’s revised ratings are better than its initial guidance of up to three notches, we believe the ratings still do not fully reflect the key strategic actions we have taken in recent years.  However, their acknowledgment of our long-term partnership with MUFG as well as our industry-leading capital and liquidity highlight some of the transformative steps we have taken.  With our de-risked balance sheet, stable sources of funding, diverse business mix and strong leadership team, we are well positioned to deliver for clients and shareholders.

And let certainly not forget JP Morgan:

The negative outlook on the parent holding company reflects Moody’s view that government support for US bank holding company creditors is becoming less certain and less predictable, given the evolving attitude of US authorities to the resolution of large financial institutions, whereas support for creditors of operating entities remains sufficiently likely and predictable to warrant stable outlooks.

 

The lowering of the standalone credit assessment to a3 positions JP Morgan in the first group of firms with significant global capital market activities. This position reflects the risks related to JP Morgan’s (i) very large capital markets business (representing 26% of reported firm-wide revenues in 2011); (ii) relatively high absolute level of secured and unsecured wholesale funding within the overall balance sheet; and (iii) the recent control failure within its Chief Investment Office (CIO), which has tarnished JP Morgan’s otherwise strong track record of risk management. These factors are mitigated by (i) JP Morgan’s diversified and sustainable earnings streams from its five other lines of business; (ii) relatively low earnings volatility compared with the peer group; (iii) good structural liquidity and large liquidity pool; (iv) capital levels that are solid and resilient under Moody’s stress tests; and (iv) leverage that is below the industry median.

 

JP Morgan’s recently announced loss within the CIO was an important factor in the downgrade of the standalone credit profile. It illustrates the challenges of monitoring and managing risk in a complex global organization — and highlights the opacity of such risks. The firm has substantial earnings and liquidity, which affords it the time to work out of the positions. Management is also acting aggressively to stem the losses and has already added new controls to the CIO.

 

These risk factors have been fully incorporated into the current standalone assessment. Since JP Morgan is positioned in the first group of firms with global capital markets operations, upward pressure on the rating is unlikely, absent a material shrinking and de-risking of the investment bank, which Moody’s does not anticipate. Any further control failures, a marked increase in risk appetite or a willingness to increase leverage could lead to downward pressure on the ratings.

In Summary:

  • Bank of America L-T senior unsecured debt cut to Baa2 from Baa1, outlook negative.
  • Barclays L-T issuer rating cut to A3 from A1, outlook negatuve
  • Citigroup L-T senior debt cut to Baa2 from A3, outlook negative
  • Credit Suisse Group L-T deposit, senior rating cut to A1 from Aa1, outlook stable
  • Goldman Sachs Group L-T senior unsecured debt cut to A3 from A1, outlook negative
  • HSBC Holdings L-T senior debt cut to Aa3 from Aa2, outlook negative
  • JPMorgan Chase L-T senior debt cut to A2 from Aa3, outlook negative
  • Morgan Stanley L-T senior unsecured debt cut to Baa1 from A2, outlook negative
  • Royal Bank of Scotland Group L-T senior debt cut to Baa1 from A3, outlook negative
  • Royal Bank of Scotland plc L-T deposit rating cut to A3 from A2, outlook negative
  • BNP Paribas L-T debt, deposit rating cut to A2 from Aa3, outlook stable
  • Credit Agricole L-T debt, deposit rating cut to A2 from Aa3, outlook negative
  • Royal Bank of Canada L-T deposit rating cut to Aa3 from Aa1, outlook stable
  • Societe Generale L-T debt, deposit cut to A2 from A1, outlook stable
  • UBS L-T debt, deposit cut to A2 from Aa3, outlook stable
  • Deutsche Bank AG L-T deposit rating cut to A2 from Aa3, outlook stable

Of course, for what really matters we go straight to the clients, and show the top 5 issuers, not banks, all corporate issuers, who are most viewed by all of Moody's clients. Aka the real bucket list.

Full report:

Moody's downgrades firms with global capital markets operations

New York, June 21, 2012 -- Moody's Investors Service today repositioned the ratings of 15 banks and securities firms with global capital markets operations. The long-term senior debt ratings of 4 of these firms were downgraded by 1 notch, the ratings of 10 firms were downgraded by 2 notches and 1 firm was downgraded by 3 notches. In addition, for four firms, the short-term ratings of their operating companies were downgraded to Prime-2. All four of those firms also now have holding company short-term ratings at Prime-2. The holding company short-term ratings of another two firms were downgraded to Prime-2 as well.

"All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities", says Moody's Global Banking Managing Director Greg Bauer. "However, they also engage in other, often market leading business activities that are central to Moody's assessment of their credit profiles. These activities can provide important 'shock absorbers' that mitigate the potential volatility of capital markets operations, but they also present unique risks and challenges." The specific credit drivers for each affected firm are summarized below.

Today's rating actions conclude the review initiated on 15 February 2012 when Moody's announced a ratings review prompted by its reassessment of the volatility and risks that creditors of firms with global capital markets operations face. In the past, these risks have led many institutions to fail or to require outside support, including several firms affected by today's rating actions. Today's actions, however, reflect not only the credit implications of capital markets operations. They also reflect (i) the size and stability of earnings from non-capital markets activities of each firm, (ii) capitalization, (iii) liquidity buffers, and (iv) other considerations, including, as applicable, exposure to the operating environment in Europe, any record of risk management problems, and risks from exposure to US residential mortgages, commercial real estate or legacy portfolios.

RATINGS RATIONALE -- STANDALONE CREDIT DRIVERS

Moody's assessment of each firm's standalone credit profile led to the following relative positioning of the firms:

--FIRST GROUP

The first group of firms includes HSBC, Royal Bank of Canada and JPMorgan. Capital markets operations (and the associated risks) are significant for these firms. However, these institutions have stronger buffers, or 'shock absorbers,' than many of their peers in the form of earnings from other, generally more stable businesses. This, combined with their risk management through the financial crisis, has resulted in lower earnings volatility. Capital and structural liquidity are sound for this group, and their direct exposure to stressed European sovereigns and financial institutions is contained.

Firms in this group now have standalone credit assessments of a3 or better (on a scale from aaa, highest, to c, lowest). Their main operating companies now have deposit ratings of Aa3, and their holding companies, where they exist, have senior debt ratings between Aa3 and A2. Their short-term ratings are Prime-1 at both the operating and holding company level.

--SECOND GROUP

The second group of firms includes Barclays, BNP Paribas, Credit Agricole SA (CASA), Credit Suisse, Deutsche Bank, Goldman Sachs, Societe Generale and UBS. Many of these firms rely on capital markets revenues to meet shareholder expectations. Their relative position reflects a combination of differentiating and sometimes adverse factors. Capital markets operations constitute a large part of the overall franchises for Credit Suisse, Goldman Sachs, Barclays, and Deutsche Bank, but less so for UBS, Societe Generale, BNP Paribas and CASA's cooperative group, Groupe Credit Agricole.

Other factors contribute to the relative positioning. For example, Barclays, BNP Paribas and Groupe Credit Agricole have, to varying degrees, relatively robust shock absorbers. Exposure to capital markets businesses is very high for Goldman Sachs, but this is balanced by a record of effective risk management. Barclays, BNP Paribas, Groupe Credit Agricole, and Deutsche Bank also have sizeable but varying degrees of exposure to weaker European economies. Some firms are relatively weak with regard to structural liquidity or reliance on wholesale funding.

Firms in this group now have standalone credit assessments of baa1 or baa2. Their deposit ratings range between A1 and A2, and their short-term ratings are Prime-1 at the operating company level. Their holding companies, where they exist, have senior debt ratings between A2 and A3 and short-term ratings between Prime-1 and Prime-2.

--THIRD GROUP

The third group of firms includes Bank of America, Citigroup, Morgan Stanley, and Royal Bank of Scotland. The capital markets franchises of many of these firms have been affected by problems in risk management or have a history of high volatility, while their shock absorbers are in some cases thinner or less reliable than those of higher-rated peers. Most of the firms in this group have undertaken considerable changes to their risk management or business models, as required to limit the risks from their capital markets activities. Some are implementing business strategy changes intended to increase earnings from more stable activities. These transformations are ongoing and their success has yet to be tested. In addition, these firms may face remaining risks from run-off legacy or acquired portfolios, or from noteworthy exposure to the euro area debt crisis.

Firms in this group now have standalone credit assessments of baa3. Their deposit ratings are A3 at the operating company level. Their holding companies, where they exist, have senior debt ratings between Baa1 and Baa2. Their short-term ratings are Prime-2 at both the operating and holding company level.

Moody's has today published a special comment titled "Key Drivers of Rating Actions on Firms with Global Capital Markets Operations" (http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_143246), which provides more detail, including the rating rationale for each firm affected by today's actions. Please refer to the following webpage for additional related announcements: http://www.moodys.com/bankratings2012

RATINGS RATIONALE - SENIOR DEBT AND DEPOSITS

Moody's systemic support assumptions for firms with global capital markets operations remain high, given their systemic importance, and have not been a key driver of today's rating actions. While Moody's recognizes the clear intent of governments around the world to reduce support for creditors, the policy framework in many countries remains supportive for now, not least because of the economic stress currently stemming from the euro area and the potential systemic repercussions of large, disorderly bank failures and the difficulty of resolving large, complex and interconnected institutions.

However, reflecting the view that government support is likely to become less certain and predictable over time, Moody's has assigned negative outlooks on certain supported ratings of entities affected by today's actions, particularly at the holding company level, as discussed in detail in the firm-specific summaries below. Moody's view on support considers efforts by policymakers globally to create resolution and bail-in regimes that allow for more flexible and limited support in a stress scenario.

RATINGS RATIONALE -- SUBORDINATED DEBT AND HYBRIDS

In addition, Moody's has today downgraded the subordinated debt and hybrid ratings of the firms whose senior debt ratings have been repositioned. The downgrades reflect the revised senior debt ratings and, in some cases, also the removal of systemic support assumptions from subordinated debt classes. In Moody's view, systemic support in many countries is no longer sufficiently predictable and reliable going forward to warrant incorporating systemic-support driven uplift into these debt ratings.

RATING IMPLICATIONS FOR SOME SUBSIDIARIES WILL BE ASSESSED SEPARATELY

Moody's has also today taken rating actions on a number of subsidiaries and legal entities of firms with global capital markets activities, as summarized below. However, for some other subsidiaries of firms included in today's announcement, Moody's will separately assess the impact of their parents' reduced credit strength.

RATING REVIEWS OF MACQUARIE AND NOMURA WERE CONCLUDED EARLIER

Of the 17 banks and securities firms with global capital market operations that were placed on review for downgrade in February, the reviews of two firms were concluded separately. Please see the following press releases for further information: "Moody's downgrades Nomura Holdings to Baa3 from Baa2; outlook stable, (http://v3.moodys.com/viewresearchdoc.aspx?docid=PR_240381) published 15 March 2012, and "Moody's downgrades Macquarie Bank to A2, Macquarie Group to A3," (http://v3.moodys.com/viewresearchdoc.aspx?docid=PR_240306) published 16 March 2012.

 

And specifically:

 

MORGAN STANLEY

Morgan Stanley’s senior unsecured long-term debt ratings were downgraded to Baa1 from A2 and the long-term deposit and issuer ratings of Morgan Stanley Bank, N.A. were downgraded to A3 from A1. The short-term ratings of both firms were lowered to Prime-2 from Prime-1. Moody’s also downgraded Morgan Stanley’s standalone credit assessment, to D+/baa3 from C/a3. The outlook on the standalone credit assessment and the ratings of Morgan Stanley’s operating subsidiaries is stable, while that on the senior debt and subordinated debt ratings of (or guaranteed by) the parent holding company is negative.

Morgan Stanley’s ratings benefit from three notches of uplift due to external support assumptions. This includes one notch of uplift from its largest shareholder, Mitsubishi UFJ Financial Group (MUFG, deposits Aa3, standalone credit assessment at C/a3 at Bank of Tokyo-Mitsubishi UFJ, Ltd), and two notches of uplift owing to Moody’s belief that there is a high likelihood that Morgan Stanley, as a systemically important financial institution, would receive support from the US government in the event such support was required to prevent a default. The one notch of uplift reflecting potential support from MUFG is the reason the downgrade was less than the guidance Moody’s provided on 15 February.

The lowering of the standalone credit assessment to baa3 positions Morgan Stanley in the third group of firms with significant global capital markets activities. This position reflects (i) the firm’s commitment to the global capital market business, on which it relies heavily for earnings; (ii) its historically high level of earnings volatility; and (iii) the problems in risk management and controls the firm suffered during the crisis. Partly mitigating these factors are (i) the firm’s gradually increasing "shock absorbers" in the form of earnings from other more stable businesses (albeit still below that of most peers); (ii) its reduced risk appetite, improved liquidity profile and stronger capital position; and (iii) enhancements to risk management, internal processes and controls.

The stable outlook on Morgan Stanley’s standalone credit assessment and the ratings of its operating subsidiaries reflects the view that the capital markets-related risk factors have now been fully incorporated into the ratings. Moody’s does not expect significant upward pressure on the firm’s ratings. Any indications of control failures, a marked increase in risk appetite or deterioration in leverage or other capital metrics would lead to downward pressure on the ratings.

The negative outlook on the parent holding company reflects Moody’s view that government support for US bank holding company creditors is becoming less certain and less predictable, given the evolving attitude of US authorities to the resolution of large financial institutions, whereas support for creditors of operating entities remains sufficiently likely and predictable to warrant stable outlooks.

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Thu, 06/21/2012 - 17:28 | 2548845 PeterLemonJello
PeterLemonJello's picture

Par for the course round these parts...

Thu, 06/21/2012 - 17:34 | 2548878 ghengis86
ghengis86's picture

Baa Baa Black Swan have you any more fucking lives left after dodging a three notch down grade and a debilitating margin call you fucking rat bastards shit bags?!

Thu, 06/21/2012 - 17:36 | 2548886 ilion
ilion's picture

What is more useful? Reading BS from Moody's or watching this:http://www.youtube.com/watch?v=pDxn0Xfqkgw&feature=related ?

Thu, 06/21/2012 - 17:39 | 2548894 iDealMeat
iDealMeat's picture

What??   Nothing on Wells Fargo??  But, But..  Oh, wait.. 

 

Fuck You Warren Buffett..    YOu too Bernanke..

Thu, 06/21/2012 - 17:58 | 2548913 flacon
flacon's picture

Ok, I admit. I DIDN'T READ THE ENTIRE ARTICLE BEFORE COMMENTING... ;)

 

Flacon downgrades the world to "S.H.I.T.+."

Thu, 06/21/2012 - 18:00 | 2548940 SilverTree
SilverTree's picture

/I just swallowed my own vomit/

Thu, 06/21/2012 - 19:02 | 2549070 sunaJ
sunaJ's picture

Three years ago, I would have agreed with anyone that believed there was rampant corruption in the markets.  Through a process of becoming more aware, it is only with the greatest effort in self-control that I do not take great pleasure in selecting one of these arseholes and making it my personal mission to bring them much pain.  It is corruption that now costs lives and has sent the Republic down the shitter.

Your day will come, you treasonous scum.

 

Thu, 06/21/2012 - 20:11 | 2549274 Manthong
Manthong's picture

People just don't realize how big a difference a couple lousy billion can make.

Thu, 06/21/2012 - 20:46 | 2549359 Alea Iactaest
Alea Iactaest's picture

You ask why WFC isn't on the list? Obviously a rhetorical question. And obviously one more example of cronies tipping off cronies with ABSOLUTELY NO THREAT OF BEING HELD ACCOUNTABLE as the name traded in the green most of the morning, even as its peers all tipped into the red. Just in case anyone needed an(other) example of insider knowledge/trading.

Remind me how this is "investing" and not "gambling"... oh yeah, for the TBTFs it's obviously investing. Any muppets holding equities are gamblers whether they call it that or not; swimming with the fucking sharks.

Fri, 06/22/2012 - 02:47 | 2550032 Vaiman
Vaiman's picture

No wonder the bible states when Jesus Christ comes back to earth to judge the nations....the greedy rich will be hiding from him under the rocks and in caves etc.  Probably in their underground bunkers and facilities in the mountains.  They won't be able to hide though.  They will answer if they don't turn to God and change their direction.  The "love of" money is the root of all eveil!  Not money....but the love of it.  It's the sin of covetousness!    Money can be used for good as well, but not by those who are greedy because they are too busy trying to aquire more and more and won't part with it to help others.  Such fools....as if they can take it with them....such vanity!!

Thu, 06/21/2012 - 18:00 | 2548941 Soul Train
Soul Train's picture

... yep, sure sounds like cronyism to me ...

"and two notches of uplift owing to Moody's belief that there is a high likelihood that Morgan Stanley, as a systemically important financial institution, would receive support from the US government in the event such support was required to prevent a default."

This whole charade is nausiating. When will the Fed just go away???

Gold is THE standard.

 

Thu, 06/21/2012 - 18:02 | 2548947 vast-dom
vast-dom's picture

the fed will go away when there is no more plasma to suck from the populace. 

Thu, 06/21/2012 - 18:23 | 2548984 The Big Ching-aso
The Big Ching-aso's picture

 

 

Well on the brite side they got a ways 2 go still before Zyy3.

Thu, 06/21/2012 - 19:06 | 2549086 withnmeans
withnmeans's picture

Don't you get it ? This is not a game for us to play, let the Big Boy Bankers play it out.

They knew this was coming, it was in the cards. Now they get to play the old game with each other "I'll play with yours if you play with mine". They are buying each other up, this makes it all look good for the home gamers to inject their money "just so they can wipe you out". 

Look, if the rest of the world refuses to play along they will not be able to progress any farther. 

 

Just Stay Out, the Big Reset is coming !!!

Thu, 06/21/2012 - 19:38 | 2549176 vast-dom
vast-dom's picture

withnmeans: if you believe what you type then you go SHORT. ergo, you really don't know what you are typing.

Thu, 06/21/2012 - 20:51 | 2549380 Jack Napier
Jack Napier's picture

When the derivatives bubble comes crashing you won't be able to cash in your short positions either, since they are, wait for it, derivatives. Physical metal is the only way to beat these guys.

Thu, 06/21/2012 - 21:45 | 2549506 Jack Napier
Jack Napier's picture

Thumbs down? Really? I will assume for the sake of argument that it was due to not understading my post, and that trolls do not exist.

Without derivatives there is no financial system. Sure you will be due a profit, but you won't get it.

MFGLOBALED'ED!
... or for the phoenetically challenged, MF glow bulleted

Thu, 06/21/2012 - 20:02 | 2549235 withnmeans
withnmeans's picture

Vast-dom,  if you believe what you type then you go SHORT. ergo, you really don't know what you are typing.

 

Let me guess, under 32 years old. Haven't done much in life that you can put your name on it. Hmm, sit at home waiting for the world to end. Oh, I think you had some college life, but you drank more then studied ...

Listen Dom, life is short, you need to live instead of bitching about life. I have travelled the world, and I have friends around the globe, I have a good sense about what is going on. However I'm not going to just sit around and wait for it to fall apart, not ready for a box yet, and neither are you "I reckon" !!!

Cheers

Thu, 06/21/2012 - 22:02 | 2549616 FlyoverCountryS...
FlyoverCountrySchmuck's picture

All the Moody's people have to do is look at what happened to the former S+P CEO.

Threats of Audits, SEC Investigations, SEIU goons threatening them at home, and thier kids at school, etc.etc...

If M had downgraded JPM 3 spots, it would be like AIG all over gain, You didn't REALLY think the Obamafascists were going to allow that, just 4 1/2 months out from election day, with already falling Obama polling numbers, and an endless stream of already-bad news, did you?

Thu, 06/21/2012 - 20:31 | 2549327 Al Gorerhythm
Al Gorerhythm's picture

S.H.I.T.+? What's it rolled in, sugar?

Thu, 06/21/2012 - 21:02 | 2549412 Buck Johnson
Buck Johnson's picture

Warren Buffett stoped this, he sure did.  Our whole system is a ponzi waiting to go under.

Thu, 06/21/2012 - 17:38 | 2548888 vast-dom
vast-dom's picture

 

 

 

  1. 5:31p

    BREAKING

     

    Goldman Sachs shares up 0.3% following downgrade

  2. 5:30p

    BREAKING

     

    Citigroup shares up 0.8% after Moody's downgrade

  3. 5:30p

    BREAKING

    Bank of America shares up 1.2% after downgrade

     

     

     

     

     

    MUHAHAHAAA IT'S ALL FUCKED! BRING THE CRASH BRING IT!

 

Thu, 06/21/2012 - 17:44 | 2548908 vast-dom
vast-dom's picture

i have to say that anything short of blatent putrid and egregious will just no longer do. this is beyond scammed out!

Thu, 06/21/2012 - 18:26 | 2548996 EscapeKey
EscapeKey's picture

Think of the rally we'll have when the US is downgraded by a notch or two!

Thu, 06/21/2012 - 18:31 | 2549002 old naughty
old naughty's picture

what /do/ can you expect...

Thu, 06/21/2012 - 18:43 | 2549029 vast-dom
vast-dom's picture

the whore was beaten raped left for dead.....BULLISH hey at least she has a pulse.....who got AIDS and is spreading contagion......BULLISH at least....uh......BULLISH!!! Whore is dead.....she will come back a zombie, trust us....and make us more $$$....we will ZIRP QE her back to life....BULLISH!!!!! Her stock rises no matter what!!!!!

Thu, 06/21/2012 - 18:02 | 2548948 SnobGobbler
SnobGobbler's picture

but the cnbs said to buy financials after the downgrade....I hope they all go to zero; fucking cry-baby bankers; oh and rot in hell JPM.

Thu, 06/21/2012 - 18:30 | 2548994 The Big Ching-aso
The Big Ching-aso's picture

 

 

When are they gonna start rating different algos?

Thu, 06/21/2012 - 18:38 | 2549024 potlatch
potlatch's picture

You mean the actual storage pools in which the genetically engineered quants are held in near-suspended animation and fed data streams?

 

 

No one sees those buddy.  no one.

Thu, 06/21/2012 - 19:00 | 2549063 post turtle saver
post turtle saver's picture

The spice must flow for the Mentats.

Thu, 06/21/2012 - 19:46 | 2549209 Jumbotron
Jumbotron's picture

+1000 Sandworms

Thu, 06/21/2012 - 18:37 | 2549020 Arnold Ziffel
Arnold Ziffel's picture

"Do I still get my $24 million Bonus?"

Thu, 06/21/2012 - 19:40 | 2549189 resurger
resurger's picture

O_0

 

Thu, 06/21/2012 - 20:07 | 2549260 resurger
resurger's picture

Just wait for the future traders tomorrow, they will fuck them up ... 100%

Thu, 06/21/2012 - 18:29 | 2549003 whatsinaname
whatsinaname's picture

Was at a Design & Manufacturing Expo the other day in Chicago (admission fee $55 if you walked in and free if you pre-registered). Across the hallway was a Morningstar Investment conference (admission fee $975 if you walked in and the rest by invitation only). Status Quo carries on....

Thu, 06/21/2012 - 17:29 | 2548849 kindape
kindape's picture

what is the significance? (morgan stanley 2 notches vs 3?)

Thu, 06/21/2012 - 17:39 | 2548863 Alea Iactaest
Alea Iactaest's picture

Business Insider (that rag!) had this quote earlier:

"Black Rock's Larry Fink said that his massive firm might have to stop doing business with some banks if their ratings are cut. Not, he said, because he wants to, but because he is contractually obligated to his clients to do so."

Sounds to me like a 3 notch downgrade might have caused real pain.

Thu, 06/21/2012 - 18:18 | 2548979 Matt
Matt's picture

The difference is basically $3 Billion in collateral requirements per notch cut in rating.

Thu, 06/21/2012 - 18:34 | 2548999 The Big Ching-aso
The Big Ching-aso's picture

 

 

Things aren't really that bad.   FB closed green again today.

Thu, 06/21/2012 - 21:14 | 2549452 jerry_theking_lawler
jerry_theking_lawler's picture

nope. with mark to fantasy....everything will be OK.

Thu, 06/21/2012 - 17:29 | 2548850 Ms. Erable
Ms. Erable's picture

MS with a 2-stroke penalty? Shit, they'll make that up on the back nine.

Thu, 06/21/2012 - 17:44 | 2548912 JohnG
JohnG's picture

"....and two notches of uplift owing to Moody's belief that there is a high likelihood that Morgan Stanley, as a systemically important financial institution, would receive support from the US government in the event such support was required to prevent a default."

Fuck that.

Thu, 06/21/2012 - 17:29 | 2548851 reader2010
reader2010's picture

They don't want to piss off some SWFs.

Thu, 06/21/2012 - 17:29 | 2548852 Piranhanoia
Piranhanoia's picture

2 hours of telebribery to delay the decision.

Thu, 06/21/2012 - 17:29 | 2548854 Budd aka Sidewinder
Budd aka Sidewinder's picture

This summer is going to be very very hot

Thu, 06/21/2012 - 17:29 | 2548855 PicassoInActions
PicassoInActions's picture

and market does not reacts...

Thu, 06/21/2012 - 17:32 | 2548868 Alea Iactaest
Alea Iactaest's picture

Sure it did. MS is up 3.5% AH.

Thu, 06/21/2012 - 17:36 | 2548882 Alea Iactaest
Alea Iactaest's picture

And now being faded.

Thu, 06/21/2012 - 17:48 | 2548919 rocker
rocker's picture

It looks like the HFTs along with MMs JPMorgan, GS, WFC, C, MS and Deutche Bank will ramp up their own stocks.

After all, we have NO real market anymore. It is whatever the Market Makers want it to be.  I call it pitiful.

Thu, 06/21/2012 - 18:06 | 2548955 EscapeKey
EscapeKey's picture

Market makers? As in, multiple?

They're all operating together. They're in absolute collusion. If there was an agency in charge of oversight of financial markets, it would probably break multiple anti-competitive laws, hell possibly even RICO laws, but we don't, or at least that's the case in the event that the beneficiary is a connected insider.

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