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MS 1 Year CDS Hit 800/875, Curve Massively Inverted

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Tue, 10/04/2011 - 09:25 | 1736704 Bithead1
Bithead1's picture

Oh, I thought that was a chart showing the decline of BOA account holders...my bad

Tue, 10/04/2011 - 09:42 | 1736790 jez
jez's picture

I can't understand it. Just the other day BOA announced it was "delayering" thousands and thousands of its wage slaves, and STILL the stock is being shot to shit.

Dumb PR-speak -- check.

Mass redundancies -- check.

New monthly charge on checking accounts -- check.

Thick-as-pigshit CEO -- check.

What the hell more does it take to be a success in America today?

Tue, 10/04/2011 - 10:03 | 1736882 tmosley
tmosley's picture

Not being based in America?

Tue, 10/04/2011 - 10:32 | 1737023 Comay Mierda
Comay Mierda's picture

BAC website down again lol

Tue, 10/04/2011 - 11:06 | 1737183 Oh regional Indian
Oh regional Indian's picture

Perhaps shortly to be known as 

Bank of Chimerica!

Smile, that's my hand in your pocket!


Tue, 10/04/2011 - 10:27 | 1737006 Withdrawn Sanction
Withdrawn Sanction's picture

No doubt this has been said in another thread on BOA (and if so, my apologies), but it occurs to me that the $5 charge is really way of managing the bank's liability side of its balance sheet.  If it can drive off depositors at about the same rate as its assets deteriorate, its capital remains essentially unchanged (and as a percentage of assets, its capitalization rate actually increases).  But since this arithmetic is too complicated for Moynihan and Co. it couldn't possibly be true. 

Tue, 10/04/2011 - 14:40 | 1738097 Cosmicserpent
Cosmicserpent's picture

That is a very interesting observation.  If it is true, it is a brilliant observation.  However, I don't think that bailing out the sinking boat is going to prevent the boat from sinking.  First, they have to stop knocking holes in the hull, i.e; lawsuits, soveriegn debt defaults, increased foreclosures, etc.

Tue, 10/04/2011 - 12:42 | 1737612 Yikes
Yikes's picture

Okay Tyler/people, I need input.

I just got off the phone with my retired father who just told me he put $4M into MS senior debt last week.  My jaw dropped. When asked who recommended it, he told me a Merril Lynch broker.


I just told him he should get out.  I'm I being too much of an alarmist or is it looking like MS is going down?  If does go down, any chance of recoverying anthing with his senior debt position?


Tue, 10/04/2011 - 13:27 | 1737792 Widowmaker
Widowmaker's picture

If you don't know then it is hella' time to exit or hedge the position.

Tue, 10/04/2011 - 16:57 | 1738951 Freddie
Freddie's picture

Is daddy retired or retarded?  I thought it might be a typo.  He needs a dribble cup cause he is a moron.

Tue, 10/04/2011 - 09:25 | 1736706 winter is coming
winter is coming's picture

Those MS $3 Jan puts are looking attractive

Tue, 10/04/2011 - 11:15 | 1737218 geminiRX
geminiRX's picture

I took that gamble and bought 10

Tue, 10/04/2011 - 09:26 | 1736709 jm
jm's picture

Got fiat?

Tue, 10/04/2011 - 09:28 | 1736726 GeneMarchbanks
GeneMarchbanks's picture

Cramer: "Short ban in Europe is forcing shorting of US banks as proxy"

Blame Europe crowd getting larger by day.

Tue, 10/04/2011 - 09:31 | 1736741 Comay Mierda
Comay Mierda's picture

cramer is the ultimate pump and dumper

Tue, 10/04/2011 - 09:43 | 1736798 jm
jm's picture

You have full-on panic right now.  Not sure why MS gets to meet Friendo.  The CDS market is the "wisdom of crowds" but the crowd is pretty small and they don't have enough information about exposures. 

DeutscheBank doing a lot of talk about how solid their shit is.  Bad sign for the biggest CDS force around.



Tue, 10/04/2011 - 09:34 | 1736746 ZeroPower
ZeroPower's picture

A recession at MS is near!!

Tue, 10/04/2011 - 09:44 | 1736803 jm
jm's picture

Bonus = your paycheck clears.

Tue, 10/04/2011 - 11:24 | 1737246 Bananamerican
Bananamerican's picture

the smartest guys ...in the men's room

Tue, 10/04/2011 - 13:44 | 1737859 jm
jm's picture

ZeroPower is as smart as they come.  The Morgue may be following the Goldman route re: bonuses.

Tue, 10/04/2011 - 09:26 | 1736712 GeneMarchbanks
GeneMarchbanks's picture

Huh? Who woulda thunk...

Tue, 10/04/2011 - 09:29 | 1736729 fuu
fuu's picture


Tue, 10/04/2011 - 09:26 | 1736714 PaperBear
PaperBear's picture

Some help for a CDS-illiterate person, please.

The horizontal axis is year-on-year and the vertical axis is percentage basis points ?

Tue, 10/04/2011 - 09:29 | 1736733 FMR Bankster
FMR Bankster's picture


Tue, 10/04/2011 - 09:36 | 1736756 ZeroPower
ZeroPower's picture

Vertical is midpoint of b/a for various flavors of MS CDS.

Just like with the treasury yield curve, when it gets inverted, one expects bad shit to go down.

No reason to be paying MORE for protection in the near term that in the longer term now is there?

Tue, 10/04/2011 - 09:41 | 1736783 Fips_OnTheSpot
Fips_OnTheSpot's picture

Transitory!! The curve will re-invert *)


Haha.. gotcha!



*) on the appr. level

Tue, 10/04/2011 - 09:54 | 1736841 MillionDollarBonus_
MillionDollarBonus_'s picture

Don't listen to these zero hedge bullies. An inverted CDS curve is NOT necessarily bearish for Morgan Stanley. This just indicates the loss of credibility of the CDS market as a whole. The CDS curve is highly variable because this is an extremely illiquid and unprofessional market. To indicate a possible bankruptcy by a financial powerhouse like Morgan Stanley is completely absurd, and I would advise you to ignore this doomer nonsense in the future.

Tue, 10/04/2011 - 10:05 | 1736888 fuu
fuu's picture

Not really one of your best efforts.

Tue, 10/04/2011 - 11:41 | 1737308 topcallingtroll
topcallingtroll's picture

Give him credit for trying. We have been running short on trolls lately. Been kinda lonely around here. He does make a good point. This inversion took what? Ten major trades to accomplish? Wisdom of crowds is most evident when there is an actual crowd.

Tue, 10/04/2011 - 10:09 | 1736909 blindside
blindside's picture

Seems like all of the TBTF would have been bankrupt had Uncle Sugar not bailed them out. I seem to recall 'absurdity' and 'unthinkable' becoming reality around 2007/2008.

Are they still in the TBTF still, or more like Lehman now?

Tue, 10/04/2011 - 10:10 | 1736910 blindside
blindside's picture


Tue, 10/04/2011 - 10:35 | 1737039 Withdrawn Sanction
Withdrawn Sanction's picture

This just indicates the loss of credibility of the CDS market as a whole.

So what you're saying is the CDS curve is inverted market-wide and as steeply so as MS?  Really?  The CDS market was flashing the same warnings 3 years ago and some chose to ignore or ridicule it then too.  Good luck w/that strategy working as well today as it did then.

Tue, 10/04/2011 - 10:42 | 1737066 tmosley
tmosley's picture

You didn't know?  This time will be different!

Tue, 10/04/2011 - 15:23 | 1738331 Cosmicserpent
Cosmicserpent's picture

Indeed it will. This time there will be no TARP.


Armageddon bitchez!

Tue, 10/04/2011 - 09:26 | 1736715 Abitdodgie
Abitdodgie's picture

Just another chart going down ,America is full of them .

Tue, 10/04/2011 - 09:27 | 1736720 Outlaw Of The W...
Outlaw Of The Wasteland's picture

Internal memos as to the recycling policy of staples and paperclips can't be far off.

Tue, 10/04/2011 - 09:30 | 1736738 fuu
fuu's picture

Someone is out pricing paper shredders with the last of the petty cash right now.

Tue, 10/04/2011 - 09:43 | 1736796 Hansel
Hansel's picture

Bank of America did that last month.

Tue, 10/04/2011 - 09:52 | 1736837 fuu
fuu's picture


Tue, 10/04/2011 - 09:28 | 1736723 Bithead1
Bithead1's picture

chart p0rn

Tue, 10/04/2011 - 09:30 | 1736736 unky
unky's picture

In other news Amanda Knox was offered 1 million dollar for exclusive TV interview...

Tue, 10/04/2011 - 09:34 | 1736745 InMisesITrust
InMisesITrust's picture

I hope it is with playboy, and includes a spread

Tue, 10/04/2011 - 09:36 | 1736752 Vergeltung
Vergeltung's picture

I'll second that.

Tue, 10/04/2011 - 21:06 | 1739741 StychoKiller
StychoKiller's picture

Hmm, "Acquited murderers of Italy", what's not to like?

Tue, 10/04/2011 - 09:55 | 1736851 thunderchief
thunderchief's picture

Murderous Bitch!

Tue, 10/04/2011 - 10:50 | 1737101 pupton
pupton's picture

You forgot the word "Hot"...I'd like to see a lesbo combo of her and Kasey Anthony...Mmmmmm.

Tue, 10/04/2011 - 10:38 | 1737047 Withdrawn Sanction
Withdrawn Sanction's picture


Amanda Hugandkiss? (Bart Simpson)

Tue, 10/04/2011 - 09:30 | 1736737 Cassandra Syndrome
Cassandra Syndrome's picture


MS has more liabilities than Lehman's had when it went tits up. Dexia has more than MS. 2 x Lehman's on the Global Financial System at the same time? And its a hell of lot mre bruised and battered than back in 08.

Tue, 10/04/2011 - 09:33 | 1736744 Outlaw Of The W...
Outlaw Of The Wasteland's picture

ricky ricardo, the pear shaped chink with broken teeth, lenin, and dirty david faber just went on a diatribe defending their propoganda efforts.

The entire staff of cnbc with the exception of the great santelli should be arrested and tried under the rico act.

"This isn't 2008.  The banks are fine"- vladimir cramer

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