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

Tyler Durden's picture

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mike2756's picture

20-35? That's it?

Hansel's picture

Because everyone knows that interest rates are just too high.  10-year is yielding 2.54%.

hedgeless_horseman's picture

If you have to go to your back-up gun something has gone terribly wrong.

Buckaroo Banzai's picture

Operation Twist! Love the name. Let the fucknuttery begin!

HelluvaEngineer's picture

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.


Temporalist's picture

I'd like to extoll the virtues of eating glass.

oddjob's picture

I'd like to extoll the virtues of Pledge.

JW n FL's picture



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

DeltaDawn's picture

Get your "Don't blame me, I voted for Perot!" bumper sticker while they last.

bigdumbnugly's picture

i didn't see any mention of smoke and mirrors in there but is that just implied?

Elooie's picture

So they want short term rates to increase and long term rates to decrease? Or did I read that wrong?

LawsofPhysics's picture

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.

John Law Lives's picture

More good news;

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

QE for everybody!!!

DeltaDawn's picture

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.  

DormRoom's picture

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.

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.

Smiddywesson's picture

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.

Sam Clemons's picture

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.

Mike2756's picture

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

buzzsaw99's picture

Dumbest idea evah.

SheepDog-One's picture

So its not a money shower to Wall St stocks, this QE 'whatever' will just be a clandestine rate tweeking operation?

Mercury's picture

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?

GiantWang's picture

Echo Tango Foxtrot, Bitchez!!!!!

Peter K's picture

"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 ;)

SheepDog-One's picture

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.

Smiddywesson's picture

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.

DarkStarDog's picture

Pigmen fix'n to steal the sheeple's fake wealth.

SheepDog-One's picture

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.

Doyle Hargraves's picture

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

johngaltfla's picture

Morgan Stanley is still in business? I thought Thursday forced them to go WaMu....(jk)

Smartie37's picture

This truly embodies the definition of a PONZI,

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

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

narnia's picture

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).

youngandhealthy's picture

+100....thats the way it gonna be

LawsofPhysics's picture

Yep, and gold, silver, and anything physical of practical use or barter, will explode to the moon.  Hell, got fresh water?

Gold Man-Sacks's picture

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?

youngandhealthy's picture

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?

ElvisDog's picture

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.

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.)

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.

chinawholesaler's picture

Wholesale Stationery
Promotional Products

Wholesale Bedding
Hair Products
Wholesale Stationery

Wholesale Keychain
Wholesale Pen
Lunch Box

Health Care Products
Wholesale Mouse
Wholesale Clothes Rack

Wedding Favors
Wholesale Glove
Wholesale Scissors

Tape Measure
Wholesale Waterproof Case
Bottle Opener

Garden Decorations
Promotional Gifts
Cleaner Products

Wholesale Coaster
Coca Cola Gifts
Sport Items

Coin Bank
Wholesale TelePhone
Wholesale USB Products

Wholesale Sticker
Wholesale Compressed Products
Audio Video Equipment

Wholesale Mug
Wholesale lable
Wholesale Keyboard

China Wholesale
Wholesale Glove
China Wholesale

Giveaway Material
Wholesale Glass
Wholesale Mobile Phone

Wholesale Waterproof Case
Automotive Products
Wholesale Glove

Wholesale Wallet
Voice Recorder
Wholesale Bracelet

Promotional Products