Second Bank Scrambles To Defend Morgan Stanley Against Vicious "Blogger Attack"

Tyler Durden's picture

Earlier today some blog pulled up some factual data that suggested that Morgan Stanley had $39 billion in total exposure against French banks at the end of 2010, up $30 billion from the year prior, and enough to wipe out its entire market cap and then some should French banks be pulled under. Sure enough, the stock tanked even though as CNBC pointed out "there was absolutely no news." Since then, first Credit Suisse defended Morgan Stanley for its "European exposure" (we wonder how long before Morgan Stanley returns the favor and has to defend Credit Suisse for its US exposure: judging by Credit Suisse's maximum outlier 3M USD Libor rate, not too long). And now it is bank #2's turn, in this case Alliance Bernstein, whose conclusion is that "we estimate that total risk to France and its banks is less than $2 billion net of collateral and hedges." Ah yes, collateral and hedges, which, lest we recall incorrectly, did miracles when Lehman blew up and the very fabric of net hedging offset was threatened when the viability of the initiator in the "gross" CDS chain was put into question (thank you AIG). Naturally, if and when the 3 Big French banks go down, everyone will be perfectly normal and have no problem netting of hedges. Naturally. As for the coup de grace in the AB report, it is this piece of rhetorical brilliance: "Over the last six months, there have been 5,600+ articles published by the press on the subject of "French Banks" and "Credit Risk". We believe Morgan Stanley's risk management staff and its trading units are fully aware of the highly publicized risks emanating from Europe and warnings about the firm's potential exposure to a European Sovereign crisis." And there you have it: just because everyone is aware the bank is doomed, means the bank is ok. See, this is nothing like the logic that comedy entertainment icons such as Cramer and Dick Bove used to endorse Bear and Lehman days before both imploded. Then again, the downside for AB to actually tell the truth is substantially higher (as in contagion which takes down the entire banking system, AB included), than the upside from, well, prevaricating. As for abovementioned blog, we are just waiting for the third bank to come to Morgan Stanley's defense to know it was 100% correct.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
nope-1004's picture

So if it's just a rumor, why did they need to dispell it?

Hilarious!  Keep it up Tyler.  Banks = fraud.  Fraud is a criminal offence.  Banksters need to go to jail.


oobrien's picture

Do you want to know why we're going into a deflationary depression.

Every bank in the fucking world is insolvent--sitting on a pile of shit.

You couldn't run the global printing presses fast enough to deal with that mountain of debt.

Big collapse on the way.


espirit's picture

Sell the rumor, short the news.

That ought to be a game changer.

HoofHearted's picture

Damn bloggers. Of course I decided to let MS join my stable of shorts because of that blogger. It joined BAC and JPM, which are making me 20% and 10%, respectively. OH yeah, that long FAZ is doing ok too. Damn bloggers are the whole cause of it.

Thomas's picture

More santorum coming out of Zero Hedge. Move along.

xtop23's picture

 Sure they can. Give Benny a gram of China White and a coffee pot full of rocket fuel and hell tap 0's faster than a squid trader can plead the 5th.

indygo55's picture

That is really funny! Nice one.


traderjoe's picture

All fiat currency collapses have ended in hyper-inflation. Even then some things will deflate and others inflate. Staples and needs will hyper-inflate and discretionary will deflate. You won't be able to buy a bushel of grain with fiat but the spare TV won't be worth $5.

TeresaE's picture

+100 traderjoe

Throw in the value of the USD to Yuan after hyperinflation really sets in.

Realize Motts Apple Juice, ALL Walmart branded canned goods, Kraft Mac 'n Cheese and Gerber baby food is made out of the country, not to mention insulin, aspirin and bandages.

Ugly.  Everything we need will be out of reach, our labor (unless in unions/government, and those won't keep up forever) discounted.

99% of Americans, even here, refuse to see what truths our future holds.


TheMerryPrankster's picture

Poverty, it seems remains as america's last and final growth industry. To the moon alice. Infinite growth.

We pledge allegiance to America

and to the 700 cable channels of which it spans

one nation under ben


with poverty and delusions for all.


Whalley World's picture

Ladies and Gents, can we all say it together, Quadrillion?

Reese Bobby's picture

Cool link.  Zero Hedge not real reporters like Steve Liesman!  Classic.  But stop screwing with the Canadian banks Tyler...seriously.

-Jim Flaherty,  (gasparino tough)

anonnn's picture

As for Alliance Bernstein...I just recalled how I knew that name...

AB screwed over at least 1 IBEW* Local's investd pension funds, abt 4 years ago. The Local took the hit and eliminated the option to place funds into AB. Good riddance. IMO, personal experience, they scammed the Union workers' savings.

*Int'l Brotherhood Electrical Workers

LongBalls's picture

Tyler is a bad motha'!! Damn I just love the truth for some reason.

Cliff Claven Cheers's picture

Finally we don't have to look at your nuts any longer. Thank you.

slewie the pi-rat's picture

those weren't labia?

i must need fuking trifocals and i'm thoroughly disgusted w/ myself.  again!

gotta love carnac, tho!  L0L!!!


fuu's picture

Now if we could just get LongBallsShortBrains to get over it we would be set.

equity_momo's picture

It's not true until there's been an official denial.
That's morgan Stanley fucked then,


mac768's picture

AllianceBernstein LP (NYSE: AB) is a US-based, global asset management firm, owned by the French insurance conglomerate, AXA

one culprit pats the others back

but someone has a monkey on his back

we learn that with AXA and its highly leveraged PE Business, there is another short candidate for the impending implosion

espirit's picture

New ad for Brownells Ammunition on ZH?

Must be cap a bankster day.

Hive Raid's picture

I just can't figure out why all these legit websites are hosting ads for peruvian albino porn. It must be getting popular... with people not including myself.


SeventhCereal's picture

nah its just google tracking your usage.  :-)

Hive Raid's picture

The horrors!

Now I'll never be president!

Iam_Silverman's picture

"peruvian albino porn."

"Now I'll never be president!"

Careful there - you may have just outed yourself as an SEC troll!

JW n FL's picture

That was some funny shit!

hurry shred the internet history!

JW n FL's picture

EU Banks Infected

Uploaded by on Sep 22, 2011

Fears about another global financial meltdown, continue to grow. Stocks plummeted today, with the Dow Industrial Average at one point falling as much as 527 points. In Europe, Standard & Poor's downgraded the ratings of seven Italian banks and headlines were running wild, about French banks looking for cash in the Mideast, although BNP's CEO denied those claims. This week finance ministers from the BRICS nations are meeting here in Washington at the IMF. But how much good could they really do? Economic Analyst, Gonzalo Lira weighs in.

espirit's picture

ZH getting lots of hits, more people getting away from the MSM pump & dump.

Arkadaba's picture

Sorry dude, New online advertising - ads are personalized for you! Combination of tracking your online sites, contextual advertising and past purchases. 

caerus's picture

apparently i'm into silver and russian brides

seek's picture

In soviet Russia, brides are into silver! (Couldn't resist ressurecting an old meme.)


I use adblock and donate $50 to ZH every few months.

Crisismode's picture

ADblock is a wonderful tool.

geekgrrl's picture

I do the same. I find advertising so nauseating that if I couldn't filter out the ads, I'd have to stop using the internet. I am a very frugal person, but ZH is so worth the money. I don't support the advertising business model, but I do support ZH with direct contributions. I'll just add that I think the ZH advertising business model is more sensible (if the goal is reach a large number of people) than subscription services will ever be. Yes, there will be some fraction of people who will get the benefits of TD's work for free, but financial truth is a growth industry. Volume will overcome reductions in marginal returns. And then there are people like you and me who will just donate from time to time. All I can say is: long live ZH. And thank you Tyler(s) for all the work you do.

espirit's picture

Was wondering why ZH would advertise Peruvian Albino Whizzers for sale.

Hey, this could be fun!

Arkadaba's picture

Because of geo-location I get lots of ads for miners and Canadian Banks when visiting this site (others never mind)

Cursive's picture


Google adsense uses your browsing history to determine which ads are posted on your screen.

Arkadaba's picture

Not just Adsense - most companies dropping a little codelet on your browser. 

Strike through is still not working!

espirit's picture

Geez, now all I see is Cramers face advertising financial porn.

I give, make it stop please!

Cliff Claven Cheers's picture

You can block all the adds that way, but how do the Tylers make a living?

AustriAnnie's picture

Exactly, I get ads for PM co's, travel related sites, and DSW.  I click often to support ZH and my addictions at the same time! 

geekgrrl's picture

When the peeps realize that ZH is a very valuable service and find the donate link at the top of the page?

espirit's picture

Whoa, that's better.  Now all I am getting is ads for Ukrainian Albino Pygmy Hookers w/ammo.

Chicken_Little's picture

If you are getting porn ads then you've been doing research at the same sites as the SEC investigators are using.

rosiescenario's picture

....that would be "barely legal, transexual, dwarf porn creampie sites with bestiality" I assume....