Morgan Stanley Does The (Operation) Twist, Extolls The Virtues Of QE3

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Fri, 08/05/2011 - 14:52 | 1527843 Mike2756
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20-35? That's it?

Fri, 08/05/2011 - 15:01 | 1527876 Hansel
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Because everyone knows that interest rates are just too high.  10-year is yielding 2.54%.

Fri, 08/05/2011 - 15:09 | 1527895 hedgeless_horseman
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If you have to go to your back-up gun something has gone terribly wrong.

Fri, 08/05/2011 - 15:39 | 1528006 Buckaroo Banzai
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Operation Twist! Love the name. Let the fucknuttery begin!

Fri, 08/05/2011 - 15:09 | 1527846 HelluvaEngineer
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There's a typo.  You typed "Virtures of QE3".  I think you meant "Vultures of QE3"

Edit: this pun made more sense before the typo was fixed.  I swear.


Fri, 08/05/2011 - 14:50 | 1527847 Temporalist
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I'd like to extoll the virtues of eating glass.

Fri, 08/05/2011 - 15:22 | 1527928 oddjob
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I'd like to extoll the virtues of Pledge.

Fri, 08/05/2011 - 14:52 | 1527848 JW n FL
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THE FORMER PRESIDENT OF THE WORLD BANK, JAMES WOLFENSOHN Explains how Americas Production / Manufacturing has been and is continuing to be cut into pieces and moved off shore. This is very much worth your time, if you are from the West or planning on living in the West.


America was sold off to the World.

***** “Over the last ten years, China has mounted the biggest challenge to the U.S. manufacturing sector ever seen, threatening producers of steel, chemicals, glass, paper, drugs and any number of other items with prices they cannot match. Not coincidentally, the United States has lost an average of 50,000 manufacturing jobs every month during the same period.” *****


The United States has shipped over 7 Million Manufacturing Jobs to China in the last 11 years.. along with those 7 Million Manufacturing Jobs the Tax Base that those 7 Million Manufacturing Jobs Represent. If you look at a 25% tax bracket for $50,000 dollar average pay.. over 10 years.. works out to $7 Trillion Dollars or Half our National Debt.

Former World Bank President: Big Shift Coming

James Wolfensohn, former president of The World Bank and CEO of Wolfensohn and Co., addressed Stanford Graduate School of Business students with details about his work at the World Bank during its transition years and how the equation between developed and developing countries is changing. Wolfensohn claimed that in the next 40 years, a global power shift will see today's leading economic countries drop from having 80% of the world's income to 35%.

Related Article:

Global Speaker Series:

Recorded: January 11, 2010

Fri, 08/05/2011 - 14:57 | 1527863 DeltaDawn
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Get your "Don't blame me, I voted for Perot!" bumper sticker while they last.

Fri, 08/05/2011 - 15:01 | 1527884 Waffen
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I loved perot as a teenager..  He was our only chance.

Fri, 08/05/2011 - 15:58 | 1528076 Byte Me
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Perot was never, ever, a teenager..

Fri, 08/05/2011 - 14:57 | 1527865 bigdumbnugly
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i didn't see any mention of smoke and mirrors in there but is that just implied?

Fri, 08/05/2011 - 14:58 | 1527869 Elooie
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So they want short term rates to increase and long term rates to decrease? Or did I read that wrong?

Fri, 08/05/2011 - 15:01 | 1527875 LawsofPhysics
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Okay, two important question.  1) does anyne believe this shill and 2) what will it mean for the markets?  Institutional "suckers", HFT algos, and the Federal reserve/PD twist are the only things levitating the market right now, in layman's terms, how does this help the longs?  I still think they are suckers.  Great shorts and puts yeasterday and a dead cat bounce today.  I still see one step forward, two steps back, until 1) QE3 in earnest begains or 2) the jobs picture suddenly changes.

Comments please, I want to take a vacation and want to park everything for a bit.  Just looking for a safe parking spot.  Thanks ZH for all the help these last two years.

Fri, 08/05/2011 - 15:02 | 1527879 John Law Lives
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More good news;

The US Postal System posted a $3.1 billion loss in Q3 and warns of default.

QE for everybody!!!

Fri, 08/05/2011 - 15:44 | 1528023 DeltaDawn
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I would rather have a functional postal service than all the surveillance equipment and expensive drills being conducted by Janet, but that is just me.  

Fri, 08/05/2011 - 15:06 | 1527880 DormRoom
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They were trying to flatten the curve to decrease Aggregate Demand (less imports to remedy the account balance deficit) but at the same time increasing Aggregate Demand to get out of the recession.

Didn't they read the Fed report on Operation Twist?  It was shown to be ineffective @ curtailing persistent account balance deficit, and the recession of '64.

Fri, 08/05/2011 - 15:06 | 1527889 SheepDog-One
SheepDog-One's picture

Well TARP, QE1, QE2, QE with a twist, have also all proven to be total failures as well, Im sure that detail wont stop them from more of the same though.

Fri, 08/05/2011 - 15:27 | 1527953 Smiddywesson
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Bad doggie, TARP and the QEs are working exactly as intended.  They bailed out the banks.  Changed the accounting rules.  Reinflated the equities and commodity markets for the trading desks of the banks.  Bought the banks time to call in loans and cancel your line of credit, and most of all, kicked the can down the road so the banks can slowly buy gold and buy their way out of their predicament when the US dollar does what the USG needs it to do, crash so Uncle Sam can do a chew and screw.  That's a win win situation.  The USG gets off the entitlement and debt hook, and the banks walk away solvent and stuffed with our savings (in the form of real assets like gold).

All in all, I think it's worked out really well, just not for me.

Fri, 08/05/2011 - 15:47 | 1528035 Sam Clemons
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You said it well.  People that claim Bernanke is a moron need to evaluate the premises upon which they view him.  He is not there to help every day citizens. 

He is there to help the banks, and he's done a pretty good job of it, but I think BAC will be the next sacrificial lamb since they stuffed it full of toxic assets.

I have noticed that the QE effects seem to dwindle faster and faster.  I'd guess that will happen until there are minimal effects and only gold / silver go up.

Fri, 08/05/2011 - 15:12 | 1527907 Mike2756
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So they are throwing in the towel on asset prices in favor of a stronger dollar? On the bright side, lower oil will juice demand, maybe. lol

Fri, 08/05/2011 - 15:07 | 1527891 buzzsaw99
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Dumbest idea evah.

Fri, 08/05/2011 - 15:08 | 1527892 SheepDog-One
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So its not a money shower to Wall St stocks, this QE 'whatever' will just be a clandestine rate tweeking operation?

Fri, 08/05/2011 - 15:14 | 1527897 Mercury
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So, can this be accomplished without printing any more $$ - just selling shorter term securities out of the Fed's SOMA and buying farther-out maturities with the procedes?

Fri, 08/05/2011 - 15:07 | 1527900 GiantWang
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Echo Tango Foxtrot, Bitchez!!!!!

Fri, 08/05/2011 - 15:11 | 1527904 Peter K
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"In the past the Fed has employed operation twist (in the 1960s) with the goal of raising short-term rates in order to support the dollar while keeping long end rates lower to support the economy." 

So much for those manufacturing led recovery jobs we've been hearing so much about. Bernank, going over to the dark side ;)

Fri, 08/05/2011 - 15:15 | 1527912 SheepDog-One
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I dont buy this for a minute, the entire plan since TARP has been to weaken the dollar and transfer more of our jobs overseas and weaken our economy, now we're to believe theyll reverse course and raise rates in a jobless recession? GS knows theyre lying from the start.

Fri, 08/05/2011 - 15:31 | 1527975 Smiddywesson
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Exactly.  I also say they will continue to weaken the dollar.  That's the plan, and if it weren't, the central banks OF THE WORLD would not be stacking gold.

They will continue to inflate whatever asset markets the banks are trading, and continue to manipulate those markets in favor of the banks.  Meanwhile they will print and give the money to the banks so they outrun inflation.  We, on the other hand, pay the new and inflated prices.

Fri, 08/05/2011 - 15:16 | 1527918 DarkStarDog
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Pigmen fix'n to steal the sheeple's fake wealth.

Fri, 08/05/2011 - 15:18 | 1527921 SheepDog-One
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I like Ron Pauls plan better, to null and void the FED's $1.5 trillion in bonds it has only because theyve printed it all up out of thin air.

Fri, 08/05/2011 - 15:22 | 1527931 Doyle Hargraves
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Cheerleaders for QE3 out in full force right before Jackson Hole-check

Markets wobbly and weak before Jackson Hole-check

European Disaster unfolding-check

BAC takedown imminent-check

Yeah sounds like QE be it stealth or not is already a done deal. The BAC takedown will dictate the meat of how it happens and if any CONgressional/debt brotha support will be required to eat the losses. 

Bullion, Bullets, and Beans Bitchez!-check

Fri, 08/05/2011 - 17:29 | 1528334 prophet
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Free ML.  


Fri, 08/05/2011 - 15:22 | 1527934 johngaltfla
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Morgan Stanley is still in business? I thought Thursday forced them to go WaMu....(jk)

Fri, 08/05/2011 - 15:25 | 1527947 Jonas Parker
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Fri, 08/05/2011 - 15:26 | 1527959 Smartie37
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This truly embodies the definition of a PONZI,

as incoming money is used to pay off prior investors....................

..........until we run out of NUBES !!!!!!!

Fri, 08/05/2011 - 15:40 | 1528009 narnia
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You guys are trying to prognosticate how a game of football is going to go down, without recognizing that the game being played is blitzball.

The Fed is going to set a range of interest rate "targets" along the yield curve.  This can be managed by a combination of Treasury issuance management & the Fed's open market activities- which are only limited by the Fed's imagination in our current system.  

Figuring how to accomplish these "targets" within the existing Fed balance sheet is a useless exercise.  They'll do it by any means necessary, even a balance sheet expansion.  They'll only announce the balance sheet expansion if they feel it advantageous to do so (which I don't see).

Fri, 08/05/2011 - 15:59 | 1528072 youngandhealthy
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+100....thats the way it gonna be

Fri, 08/05/2011 - 16:58 | 1528243 LawsofPhysics
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Yep, and gold, silver, and anything physical of practical use or barter, will explode to the moon.  Hell, got fresh water?

Fri, 08/05/2011 - 15:55 | 1528060 Gold Man-Sacks
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Why is Operation Twist 2 any worse than what the Fed currently does with FOMO?  Why is it worse to target longer-term interest rates?

Fri, 08/05/2011 - 15:59 | 1528077 youngandhealthy
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You R is not...and thats what they have been doing....why just use Bills? USD is a reserve currency, right? So why not use it, right?

Fri, 08/05/2011 - 16:20 | 1528143 ElvisDog
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Operation Twist2 = QE3 = rearranging the deck chairs on the Titanic. Can't wait to hear Obama explain why gasoline is $6.00 per gallon heading into the Nov 2012 elections.

Fri, 08/05/2011 - 17:19 | 1528299 Highrev
Highrev's picture

Well I guess we know who's trapped long.

(Good thing for the chumps that they've got a good bounce coming after Monday's initial sell down.)

Fri, 08/05/2011 - 19:32 | 1528517 Ye Ye
Ye Ye's picture

Ugh.  They do this, the 10y yield will go up by 50bps.

They need to target price, not quantity, or else go home.

Wed, 09/14/2011 - 04:52 | 1667429 chinawholesaler
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