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Morgan Stanley Issues Goldman Mirror Image Call: Says To Sell EURUSD With 1.30 Target

Tyler Durden's picture





 

And so the two most "credible" investment banks have had their say on the EURUSD as a result of today's 250 pip surge in the EURUSD: while Goldman earlier said to buy, buy, buy (i.e., sell) every EURUSD pip until 1.40, here is Morgan Stanley with the mirror image call.

Today we entered a short EUR/USD trade at 1.3750. While Italian 10-year bond yields have tightened from the highs reached earlier this week, we believe yields still well above 6% are unsustainable for a debt market of 1.9tr EUR (third largest in the world). This means that Italy will need to spend nearly 10% of its annual GDP on interest payments alone. Meanwhile, political uncertainties add to concerns in the Eurozone, with new regimes in Greece and Italy. We remain fundamentally bearish on EUR, and believe it will retest 1.30 as Italy runs the risk of being “too big to save.”

Confused yet? Why bother. Maybe Goldman can just skip the foreplay, dump its entire EUR inventory to Morgan Stanley and spare everyone else the drama and paternity tests.

 


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Fri, 11/11/2011 - 15:04 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

'Confused yet? Why bother. Maybe Goldman can just skip the foreplay, dump its entire EUR inventory to Morgan Stanley and spare everyone else the drama and paternity tests..'

+1

Fri, 11/11/2011 - 16:35 | Link to Comment Max Hunter
Max Hunter's picture

I'm thinking these EUR/USD bounces have more to do with flows and payments (indirect investments) than they do TA or Fundi's..  There is no reason on god's green earth the Euro should be 20% over-valued.. with all the risk out there..

Fri, 11/11/2011 - 17:30 | Link to Comment slaughterer
slaughterer's picture

Citi's Englander is on the side of MS with the 1.30 EUR/USD.  That GS call is being made by a discredited douchebag, who is ignoring the better advice of countless colleagues.  

Fri, 11/11/2011 - 15:05 | Link to Comment Captain Benny
Captain Benny's picture

Since ES trades with the EURUSD correlation nearly perfectly nowdays, I guess Morgan Stanley is saying its time to short the SPX

Fri, 11/11/2011 - 15:06 | Link to Comment Tyler Durden
Tyler Durden's picture

It means Goldman is entering risk off mode and MS is buying everything.

Fri, 11/11/2011 - 15:14 | Link to Comment jdelano
jdelano's picture

So we have to decide who's crafty and who's got their head up their ass?  Uh.  l'm gonna go with Goldman...

Fri, 11/11/2011 - 15:27 | Link to Comment Henry Chinaski
Henry Chinaski's picture

With sufficient volatility, could they both be right?

Fri, 11/11/2011 - 15:31 | Link to Comment centerline
centerline's picture

In this market, I would think so.

Fri, 11/11/2011 - 16:36 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

It means Goldman and MS are entering distraction mode as the EUR/USD pair devalues against everything else (see WTI). 

Please just keep your binoculars trained on those two highly regarded horses, because God forbid the markets come to realize that the Race To The Bottom is more than a two horse race!  Why?  Those 'long-shots' are where the fat odds and positive P&L is right now; nobody wants a crowded trade up in The Jockey Club. 

Remember the US Dollar Index component weighting:

Euro (EUR) 0.576

Japanese Yen (JPY) 0.136

British Pound (GBP) 0.119

Canadian Dollar (CAD) 0.091

Swedish Krona (SEK) 0.042

Swiss France (CHF) 0.036

 

 

Fri, 11/11/2011 - 23:04 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

jdelano postulated the following:

So we have to decide who's crafty and who's got their head up their ass?  Uh.  l'm gonna go with Goldman...

I see ... Goldman is crafty and has their head up their ass. This illustrates the quantum superposition of the states of brilliance and batshittiness inherent in every GS investment strategy. This leads to the paradox known as Schroedinger's Rat, wherein the result of any given GS investment strategy exists simultaneously in a state of astronomical profit and devastating loss. It remains in this state until it is observed on ZH, whereupon the state collapses into one or the other.

 

Sat, 11/12/2011 - 15:08 | Link to Comment 4horse
4horse's picture

if it's somehow here to be a posting/postulating about positioning for that ultimate risk, epistemology, the usual trite-and-true would of course posit the illusory in-the-box/outta-the-box derivitive thinking

suffering under such a misconception, and yet anyway somehow profit by it, Fully Delusional, naturally enough leads to such apodictic results as being again, and again, just this thoroughly dicked all over again . . .

Whereby continually thinking that 1entity has to borrow from this Peter to pay that paul, Thereby habitually assuming there are always 2competitors, does indeed result again and again in said crosspurposes x what should most certainly by now/pay later be its pperfectly clear Identity

 

you down with 1PP?

yeh you know meaning

 

PPonzi

 

ergo, words fail: so they do it with numbers

or, in terms still continually used and evidently acceptable here on wallst as at z, #1 and #2, whereby only the-trickle-down/or up-your-ass theory's considered, is it nevertheless questionable why behind-the-scenes of this now all-but-obvious yet ill Usury so many here seem to not just rely but insist upon such received wisdom as is again and again giving one another the heads-up No.2

repeatedly. and, the hidden hand, so-far-up as to seize right-on-up-and-through what's left of a spine whose very backbone is now here a brain left saying uh oh. fucked

 

again. and again, once-you-start-talkin-to-the-hand . . . http://www.youtube.com/watch?v=DwDbd4jQpkA&feature=related

Fri, 11/11/2011 - 15:36 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

I'm not sure Stolper's 1.40 call means anything for GS, while MS is probably still bullish on French banks...

Fri, 11/11/2011 - 15:58 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 <=== they're both lying!

 <=== disagree w/ tyler

                   none of the above ===>  L0L!!!

                    wait!  ============> wtf?

Fri, 11/11/2011 - 18:06 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 <=== none of the above [L0L!!!]

 <=== wtf?

Fri, 11/11/2011 - 19:11 | Link to Comment YesWeKahn
YesWeKahn's picture

I go with the crooks who have the best connection with the fraud reserve and the government.

Fri, 11/11/2011 - 15:49 | Link to Comment FinHits
FinHits's picture

I think stock market macro analysts and the financial press are mainly idiots and can comprehend only one "commonly held correlation" (usually complete bullshit) at a time. Because they focus only one item at a time, this makes the risk off/risk on volatility bullshit even it worse, since equity traders actually believe them, miraculously. Bond investors are smarter. Not sure of FX traders...

August: Debt Ceiling not pushed up=Bad. Risk off was globally taking place every day the debt ceiling was not lifted. The end of the drama=S&P downgrades USA from AAA.

September: EFSF expansion to put up 165% overguarantees and remove cash buffers from EFSF bonds not fully approved by all Eurozone parliaments=Bad. The end of the drama=EFSF expansion passed by forcing Slovakian government to resign.

October: Greece PSI to go through with -50% and full acceptance of austerity. The end of the drama=still pending, but at least G-Pap is out and austrerity on the way in.

November: Italy to go over 7% yield. The end of the drama=still bending, but Bunga Bunga out.

December: I predict we go back to August, i.e. start watching the US debt ceiling....

January: I predict China real estate bubble will be the top watch list item.

Fri, 11/11/2011 - 15:05 | Link to Comment HANKREARDON
HANKREARDON's picture

Tyler, you rock.

Fri, 11/11/2011 - 15:06 | Link to Comment Future Tense
Future Tense's picture

Bloomberg reporting that gold optimism is highest in futures market since 2004.  Could be a time to take the gas off the only currency in a bull market. 

It is countdown to ECB announcing non sterilization.  Then it will be parity time.  http://www.ftense.com/

Fri, 11/11/2011 - 15:07 | Link to Comment ssp2s
ssp2s's picture

I've always thought it'd be cheaper for MS to dump its research departments et al and play the other side of GS's advice.

If that day now has come, we are a lot closer to a collapse than I thought.

Fri, 11/11/2011 - 15:30 | Link to Comment centerline
centerline's picture

If it is true that they are on opposing sides of this bet, we are in fact much closer to sharks eating sharks because the bait fish are all eaten up (or out of the pool).

Fri, 11/11/2011 - 15:45 | Link to Comment Josh Randall
Josh Randall's picture

It's a pure ponzi play if they are --- MS will buy Goldman's crap right now, and Goldman will return the favor when given the word down the road - collusion, B!tchez

Fri, 11/11/2011 - 15:58 | Link to Comment ssp2s
ssp2s's picture

Are they really on opposite sides?  Or has one of them made a living out of doing the opposite of what it says.

Fri, 11/11/2011 - 16:14 | Link to Comment Josh Randall
Josh Randall's picture

They're both tentacles of the Fed in my estimation - separate army units of the same Legion that will play nice to survive in a crisis

Fri, 11/11/2011 - 15:09 | Link to Comment EL INDIO
EL INDIO's picture

Fellow ZeroHedgers I got an evil scenario to submit to you:

The evil masters will try to fake a Gold bubble bursting by having Gold close the year in negative territory for the first time in more than 10 years. They will do that by painting a double top on the monthly charts. The last top on a monthly closing basis was about $1838 and so they might aim for a double top below that by the end of this month. Then Gold must fall below $1400 by year end to give a negative close for the year.

They might achieve this if the eurozone shit keeps worsening and if we get recessions here and there and with a tumbling euro and a rising dollar.

This is not a prediction or a forecast, it is just an evil scenario that could happen which I’m submitting for your consideration.

What do you think ?

Fri, 11/11/2011 - 15:15 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

I don't see how this is possible without crashing the equities markets.

Fri, 11/11/2011 - 15:57 | Link to Comment sabra1
sabra1's picture

was it engineered to get rid of all shorts, have everyone go long, crash markets overnight, which would run thru all stop loss programs? YOU BET!!!

Fri, 11/11/2011 - 16:56 | Link to Comment SheepDog-One
SheepDog-One's picture

I cant wait till they do that. 

Fri, 11/11/2011 - 15:18 | Link to Comment delacroix
delacroix's picture

a smash and grab?

Fri, 11/11/2011 - 15:20 | Link to Comment Henry Chinaski
Henry Chinaski's picture

Not a problem for most folks on ZH who heard about gold before this year.  I hope you are right as I am sitting on a bit of cash exactly for that possibility.

Fri, 11/11/2011 - 15:59 | Link to Comment EL INDIO
EL INDIO's picture

Again I’m not making a prediction but yes if it happened it would be a phenomenal buying opportunity if you got the cash.

However, I think it would scare lots of people who would sell at the worst time !

Fri, 11/11/2011 - 15:49 | Link to Comment EL INDIO
EL INDIO's picture

That's usually a bearish sign because statistically the majority are losers !

Fri, 11/11/2011 - 16:09 | Link to Comment SilverRhino
SilverRhino's picture

Holy shit.  Let gold go below 1400 and I would back the fucking truck up.

 

Fri, 11/11/2011 - 17:08 | Link to Comment CPL
CPL's picture

Hmmmm...interesting.

Fri, 11/11/2011 - 15:11 | Link to Comment Racer
Racer's picture

And these GS and MS banksters are being paid  how much to issue completely opposite views on the same day?

Fri, 11/11/2011 - 15:42 | Link to Comment blindman
blindman's picture

so it is all a head game to occupy your mind and
divert your attention from the real issue?

Fri, 11/11/2011 - 16:16 | Link to Comment vegas
vegas's picture

You can't make this shit up.

2 different elite groups enter the arena, both customer books will get fucked.

 

http://vegasxau.blogspot.com

Fri, 11/11/2011 - 16:34 | Link to Comment user2011
user2011's picture

The question I have is how large is the short position they entered.   Was it a very large and significant position ?  Or just 10K ?   

 

Then they long on EUR/JPY and EUR/AUD etc...

 

Fri, 11/11/2011 - 16:43 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Feel like I'm sitting on the den couch between two angry silverback mountain gorillas play Pong.  Does it matter who wins? 

Fri, 11/11/2011 - 16:54 | Link to Comment SheepDog-One
SheepDog-One's picture

Good cop, bad cop.

Take turns.

Fri, 11/11/2011 - 17:26 | Link to Comment Bunga Bunga
Bunga Bunga's picture

Netherlands' Wilders investigates return of guilder

 

If the report is positive, the party will press for a referendum on leaving the euro, party leader Geert Wilders says in Friday's Telegraaf.

 

http://www.dutchnews.nl/news/archives/2011/11/pvv_investigates_return_of...

Fri, 11/11/2011 - 18:23 | Link to Comment Mario55
Mario55's picture

If the weak countries exit the euro (as treaties seem to be re-drafted for this outcome), then the euro, in essence the new DM, becomes a strong buy.  

Fri, 11/11/2011 - 20:07 | Link to Comment Curtis LeMay
Curtis LeMay's picture

Confused yet? Why bother. Maybe Goldman can just skip the foreplay, dump its entire EUR inventory to Morgan Stanley and spare everyone else the drama and paternity tests,

Holy shit is that some of the absolute best stuf from the Tyler's ever, and the really scary part is that they're, again, spot fucking on...

Love to all. 

Fri, 11/11/2011 - 20:14 | Link to Comment snowlywhite
snowlywhite's picture

ms has the 1.3 call for weeks; together with shitty I think. Even I heard about it...

Fri, 11/11/2011 - 20:16 | Link to Comment jacksparrow
jacksparrow's picture

2012 EURO = $.75 Thats what its worth if you print enough to stabalize the eurozone $.75 LMAO

Sat, 11/12/2011 - 06:19 | Link to Comment CitizenPete
CitizenPete's picture

Goldman Chase

Do NOT follow this link or you will be banned from the site!