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Unsealed Documents Expose Morgan Stanley Forcing Rating Agencies To Inflate Ratings

Tyler Durden's picture


With Europe, the BBA, and virtually everyone shocked, shocked, that the global bank cabal schemed and colluded for years to manipulate interest rates, so far only America appears relatively blase, and totally ignorant, about the issue. Perhaps it is because the first bank exposed in the manipulation scheme so far is European, perhaps because it is just tired of all the endless crime coming out of the criminal complex known as Wall Street. It is unclear. Then again, America will soon have its own manipulation scandals to deal with: and if it is not the US BBA member banks, all of whom were just as guilty as Barclays, and the only question is which bank will be the sacrificial scapegoat whose CEO will have to demonstratively depart (to warmer, non-extradition climes), it will be the following story from Bloomberg which will likely pick up much more steam over the next weeks and months, detailing how the bank which just barely avoided a triple notch downgrade (wink wink) has had previous dealings with the very same rating agencies seeking to, picture this, artificially inflate ratings! So to summarize: Fed manipulates capital markets, HFT manipulates bid ask spreads, "self-policing" CDS pricing market groups fudge the prices on trillions in Credit Default Swaps, bank cabals collude and manipulate short-term interest rates, and now banks are confirmed to have manipulated the ratings on tens of billions of bonds using monetary incentives and threats. Is there anything in this "market" that was fair over the past several decades, and was actual price discovery ever actually possible? Because by now it should be very clear going forward all the things that actually make a free and fair market are forever gone, and that without endless fraud and manipulation by all the market participants who realize that anyone defecting the ponzi group means immediate and terminal losses for all, and all those calls for an S&P 400 would actually prove to be overly optimistic.

From Bloomberg:

Morgan Stanley successfully pressured Standard & Poor’s and Moody’s Investors Service Inc. to give erroneous investment-grade ratings in 2006 to $23 billion worth of notes backed by subprime mortgages, investors claimed in a lawsuit, citing documents unsealed in federal court.


The unsealing of the internal documents from Moody’s and Standard & Poor’s came in one of the largest ratings lawsuits to emerge from the 2008 financial crisis. The lawsuit was filed in 2008 by Abu Dhabi Commercial Bank, based in the United Arab Emirates, and Washington’s King County, which includes Seattle.


2007. SIVs issued short-term debt to fund purchases of higher- yielding long-term notes and failed when credit dried up amid the financial crisis, sparked by investments in mortgage-backed securities.


As Morgan Stanley bankers were designing the Cheyne notes, they asked Moody’s to use the same volatility assumptions for subprime-backed mortgage securities as for those that had prime home loans as collateral, the investors allege in today’s filing. The ratings company agreed, the investors claim.


“We in fact built everything,” Dorothee Fuhrmann, an executive for New York-based Morgan Stanley, said according to the documents, allegedly referring to the risk-analysis methods applied to the Cheyne ratings.

This is where it gets good:

Morgan Stanley successfully pressured New York-based S&P to raise its rating on some of the Cheyne securities, according to the plaintiffs. After Lapo Guadagnuolo, an S&P employee, told Morgan Stanley that some of the securities would get BBB ratings instead of the desired A grade, a banker e-mailed his boss and said the ratings were “very inappropriate.” S&P then agreed to give the higher rating.


Morgan Stanley earned fees totaling as much as $30 million when the Cheyne notes were issued, according to the documents.


“All of us were under instructions to rate everything that we could bring in the door, and they were measuring market share on a monthly basis,” Frank Raiter, a former analyst of residential-mortgage bonds at S&P, said in a deposition, according to the documents.


“I wasn’t real confident we were doing a very good job at it.”


Perry Inglis, the head of the S&P group that rated the Cheyne securities, wrote in an e-mail that it would be a “good idea” to figure out how to change its methodology to be more “competitive,” according to the court filing.

And the punchline:

“I’m a bit unclear if it is a big change or a ‘wee itty bitty no-one’s going to notice’ change!” Inglis is quoted as saying in an e-mail.

Turns out someone noticed.

Reuters' Allison Frankel points out that this discredits the rating agencies, who are once again exposed for being corrupt, complicit and arguably, criminal organizations, betraying any core values for the client's buck.

In a series of filings in federal court in Manhattan, Abu Dhabi Commercial Bank and its lawyers at Robbins Geller Rudman & Dowd disclosed thousands of pages of internal communications and deposition transcripts to back their claims that S&P and Moody's are liable for fraud and negligent misrepresentation in connection with their rating of a structured investment vehicle underwritten by Morgan Stanley. Based on a declaration by plaintiffs that accompanied the documents, a huge percentage of the newly disclosed material has never previously been seen by the public -- and a good many of the documents deal not just with the Morgan Stanley SIV but more broadly with the rating process inside S&P and Moody's at a time when the two leading agencies were swamped with mortgage-backed securities to rate.


Robbins Geller also provided a helpful CliffsNotes version of the evidence in the form of an unredacted response to the defendants' motion for summary judgment. (A redacted version was filed in February, with page upon page blacked out.)  This is a hot filing. Abu Dhabi quotes deposition testimony from "S&P's most senior quantitative analyst in Europe," for instance, that says "the ratings of (the SIVs) were inappropriate because the ratings of the underlying assets were not appropriate. So it leads to the conclusion that they should not have been rated." In other snippets quoted in the filing, rating agency analysts complained about "difficulties in explaining HOW we got to these numbers since there is no science behind it" and about "(making) up haircuts that were palatable to SIV issuers."


A lead S&P analyst on the deal, according to the plaintiffs, said in an email to his boss that the default rates the agency was using for asset-backed securities were guesswork. "From looking at the numbers it is obvious that we have just stuck our preverbal (sic) finger in the air," the analyst wrote.

Naturally the blame also lies with Morgan Stanley, for knowing fully well it was openly defrauding the rating process:

Morgan Stanley, according to the plaintiffs' filing, bears at least as much blame as the rating agencies: The bank allegedly wrote the Moody's report on the SIV and read the S&P report before it was released to investors. The summary judgment opposition points to evidence that Morgan Stanley pressured the rating agencies to apply methodology that didn't suit the securities and to ignore the paucity of historical data in order to grant the SIV a rating it didn't deserve. By sending a supposedly "threatening" email to an S&P higher-up when an analyst proposed granting the SIV a BBB rating, Morgan Stanley boosted the rating to an A, the plaintiffs assert. In support, they quote an email from Morgan Stanley exec Greg Drennan, who had sent the allegedly menacing email: The bank's efforts, Drennan wrote, "did get us the rating we wanted in the end."

Of course they did. You paid and threatened to get it. One wonders (not really) if the same series of events occurred last week when Morgan Stanley got just a two notch downgrade from Moody's instead of the much anticipated 3 notches.

One also wonders (not really) when US regulators will go after Morgan Stanley with eagerness that British regulators appear to be pursuing Barclays?

Full filing below



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Mon, 07/02/2012 - 19:02 | 2582056 Fluffybunny
Fluffybunny's picture

No one could see it coming

Mon, 07/02/2012 - 19:03 | 2582058 NemoDeNovo
NemoDeNovo's picture

I'm SHOCKED!!!!!!!!! </sarc>

Mon, 07/02/2012 - 19:20 | 2582105 The Monkey
The Monkey's picture

The market is moving higher. Deal with it.

Mon, 07/02/2012 - 19:34 | 2582137 SHEEPFUKKER

Fucking circle jerk.....and Happy Independence Day muppets. 

Mon, 07/02/2012 - 19:51 | 2582185 resurger
resurger's picture

Dear Muppet,

Am giving an A rating for any  SIV, CDO, MMMF, ABS, PCP,ABCP, LCD, Bathsalted IGed-Zombiedusted-Xrated concocted rocket science strucutred baffle them with bullshit financially engineered synthetic psychedelic off/on balance sheet investments nukes, our math engineers and risk managers guessed that all of the above is risk free.

And dont worry, S&P, Moodys and fetch that ass got's our back.

The fee for this email is some pocket money for some of that booty meat & blow ....


Morgan Stanely Junkie XL


Mon, 07/02/2012 - 21:02 | 2582313 withnmeans
withnmeans's picture

U.S. does it, Europe does it, even ole Japan does it ! ITS KITING on a global scale...


If I tried it I would be in Prison in a twinkling of an eye...

It is getting quite amusing that the Europeans are getting better at it then us. Not to mention that the are doing it right in front of our own faces.

Ratings do not matter anymore, ratings agencies have been a joke for several years now "there are just a few exceptions, we know who they are".


Nothing new here, Carry on..

Mon, 07/02/2012 - 21:53 | 2582404 I think I need ...
I think I need to buy a gun's picture

is it too late for a redo?

Mon, 07/02/2012 - 21:12 | 2582325 I am on to you
I am on to you's picture

If it comes with Tripple YYY+ upwards Mescal colorfull dreams  ill take two,one for my self, and one for the wife.

She to gota se this to, in full color HD,Libor or Laibor or Eurobor,think it more Maifiabored.

Happy future,planet XXX+,Jupiter is up ahead! 

Mon, 07/02/2012 - 19:39 | 2582155 HelluvaEngineer
HelluvaEngineer's picture

Riddle me this, fancy boy.  How many escape routes are there from Manhattan?

Mon, 07/02/2012 - 19:48 | 2582175 Kali
Kali's picture

Better get some stingers for the helicopters they'll be taking off the roof.

Mon, 07/02/2012 - 23:26 | 2582620 dolce vita
dolce vita's picture

i got a finger id like to stick in the air......


well  this article juuuuuuuuuust about says  it all.

Mon, 07/02/2012 - 19:38 | 2582154 disabledvet
disabledvet's picture

"I'm shocked, too" (sarcasm never on in cases such as this)..."now give those folks a raise for corrupting the system just like i told them to." LET US APPLAUD THEM...for if any of us could do so successfully...we would.

Mon, 07/02/2012 - 19:08 | 2582070 knukles
knukles's picture

Ah, it's justa smallwee itty bitty no-one’s going to notice’ change!”


Holy Jesus Jumpin' Jahospehafats, when are poeple gonna figure out the "social" portion of "social media"?

Mon, 07/02/2012 - 19:34 | 2582145 Michael
Michael's picture

You guys should all stop complaining and just thank God every day for the complete and total worldwide economic collapse that I've been baiting for the past 12 years. Egos and criminal minds are so easy to manipulate to a specific outcome. It was the only solution. 

Mon, 07/02/2012 - 21:16 | 2582329 sablya
sablya's picture

I will thank God when it is really, really, real and not just out of reach.  I don't care if there is global chaos.  Nation rising up against nation, earthquakes and famines in various places.  People fainting with fear for what is coming over the world.  Let the birth pangs begin.  The water has broken, let's go baby!!!  

Mon, 07/02/2012 - 23:35 | 2582637 RockyRacoon
RockyRacoon's picture

We have parallel ZH careers.  I've been happy to have the delay for several reasons:  1.  I get to stack deeper and higher   2.  "They" have kept the PM prices slow in rising   3.  The longer the end is delayed the more thoroughly cleansing it will be

Mon, 07/02/2012 - 21:20 | 2582337 vast-dom
vast-dom's picture

the issue with all of this is that it damages S&P and the ratings agencies a lot more than the financial institutions. Why is this important? Because the rating agencies need to downgrade said financial institutions shortly, and since these banks are already taxpayer and Fed funded they can hang on and get the advantage of claiming that downgrades don't matter when the rating agencies are on the take and innacurate....

Mon, 07/02/2012 - 21:44 | 2582384 DeadFred
DeadFred's picture

Doesn't work too well when you were the one giving the bribes and even with that they still consider you on par with doggie-do.

Mon, 07/02/2012 - 21:39 | 2582370 Never One Roach
Never One Roach's picture

"Everybody's doing it." The defense claims.

Mon, 07/02/2012 - 19:02 | 2582057 veyron
veyron's picture

At this point I would be surprised if some article suggested that there was an honest person at a bank ...

Mon, 07/02/2012 - 19:28 | 2582127 UP Forester
UP Forester's picture

....and it wouldn't surprise me if the SEC were to go after any rating agency not on the take....


....oh, wait....

Mon, 07/02/2012 - 19:41 | 2582162 Irwin Fletcher
Irwin Fletcher's picture

Here's one that surprised me: the email sent out today from for a petition asking Barclays and Citibank to stop killing gay people in Uganda. From the email:

"I expect Citibank and Barclays to live up to the values of equality and fairness, not just list them on their websites," Collin says."

There you go. Hilarious.

Mon, 07/02/2012 - 19:41 | 2582163 disabledvet
Mon, 07/02/2012 - 19:45 | 2582168 neidermeyer
neidermeyer's picture

I know one honest person at a re-insurer but that's about it..

Mon, 07/02/2012 - 21:46 | 2582390 DeadFred
DeadFred's picture

If he works in the mail room I may know the same guy

Mon, 07/02/2012 - 19:49 | 2582181 greensnacks
greensnacks's picture

"can you explain why you think our assets are worthless?" 

EU market regulator is suspicious of rating agencies


Tue, 07/03/2012 - 06:10 | 2582963 AntiLeMaire
AntiLeMaire's picture

Makes sense.

For example they've downgraded the Rabobank (a triple-A bank) a few notches, based on ... what exactly? Especially compared to the ratings of their peers this makes no sense.
I'm all for more realistic ratings, but then many other banks should be downgraded much more. The relative difference, between the former AAA (Rabo) and the formerly 'almost A' banks, is still there...

Despite tricks like this the Rabobank is one of those banks that could and can borrow money at much cheaper rates than should be possible (see recent LIEBOR chart). Of course they do suffer from these games and have to pay more, but clearly 'the market' knows that the numbers are rigged & so borrows them money cheaper than should be possible based on ratings, CDS and LIEBOR.

Ergo we have a number of banks (the 'in-crowd') with inflated ratings, who claim to be borrow money on the cheap (while many know this to be false) and have a too-good-to-be-true CDS's.
Their financial statements look like Swiss cheese, even without correcting them for obvious fraudulent misrepresentation of their 'assets'. All of them have ridiculous large derivative positions, all perfectly hedged of course (LOL). Instead one should at least include realistic counterparty risk in those derivative valuations (say 1% loss, or 0.5% or ...) and look what happens.
Can the big 20 really cover that additional loss of at least a couple of trillion? I don't think so.

And we have another set (medium or big but not the in-crowd) who are financially OK, but get comparatively lower ratings, have relatively high CDS, yet can borrow money in the open market at 'impossible' low rates. Still they pay too much when we compare financial statements & especially the quality of assets. 'Netted' derivative positions can hide any size of hole, something which is not so easy to do for a bank which has most of its assets in real estate.
A case of double standards.

Same is true for countries. 'The markets' (i.e. mostly the same set of banks) are 'concerned' with the Eurozone, yet if that where a real concern they would be looking at JP, US and UK first.
I'm not saying that there are no EZ countries with issues, but the fact is that the EZ combined is in much better shape than JP, UK or US. And this is not properly represented in the numbers.
Part of this can be explained by 'the market' being prejudiced and running along with the latest fad; but to this extent? Obviously there is manipulation.

To say that the EU market authorities are 'suspicious' or 'concerned' is the understatement of the year IMHO.
So did money change hands? How much money was paid to the rating agencies & by whom?
And why: to make a buck, to hinder the competition, to make themselves look not so bad in comparison or ... all of those?
And, importantly, can that be proven?

Mon, 07/02/2012 - 20:38 | 2582268 mendigo
mendigo's picture

Its not just banks - there has been a laxness in enforcement in the name of free market. Our government has abdicated its responsibilities essensially admitting it is incapable of comprehending or dealing with the capitalist system. It is essentially every man for himself at this point there is no authority to appeal to - the government is now absorbed in self preservation. The void is being filled by the babble of the likes of krugman. Benanke has only succeeded in demonstrating that we have no idea how this system really works the only achievent he has is to make some rich people richer and totally wiped out the concept of efficient allocation of resources. For this he went to college
What really creates growth and broadbased prosperity - bernanke has no clue.

Mon, 07/02/2012 - 21:55 | 2582408 donsluck
donsluck's picture

It would be ok if what you say is true, but unfortunatly it's not "every man for himself". That I can handle. The reality is the opposite, a quickly escalating fascist structure where you are only safe if you have a large well armed and financed army behind you.

Mon, 07/02/2012 - 21:21 | 2582339 vast-dom
vast-dom's picture

are you intimating that the articles are disreputable or the individuals at the banks?

Mon, 07/02/2012 - 19:04 | 2582061 fonzannoon
fonzannoon's picture

The only good thing that came out of this LIBOR thing is that I no longer need to look at the price of gold. The truth will come out.

Mon, 07/02/2012 - 19:15 | 2582076 knukles
knukles's picture

And until then, all of us holders of gold can continue to enjoy a manipulated market, too.

Methinking some very wrong, unsocial thoughts about reducation camps and bankers at the moment.
Or of Robert DeNiro in his tux with the Louisville Slugger

(splat spalt)

(splat splat splat spalt spalt)

Mon, 07/02/2012 - 19:04 | 2582064 LawsofPhysics
LawsofPhysics's picture

Should we expect anything less in a world where there are no real consequences for bad behavior?  Start hanging these fucks in times square and watch the markets rally.

Mon, 07/02/2012 - 19:16 | 2582095 Cursive
Cursive's picture


Regardless of idealogies, you've got to hand it to the Occupy gang.  These are the only people taking to the streets to protest this shit.

Mon, 07/02/2012 - 19:34 | 2582140 LawsofPhysics
LawsofPhysics's picture

Unfortunately, only actions will change anything from here on out.  One reason TPTB don't want to stop any of the wars or police actions, or whatever the fuck you want to call it, around the world is because should they bring my brothren home these good folks would find themselves rewarded for their service by being unemployed and at the bottom of the social structure.  TPTB know that these folks can commit to getting shit done.  I know several members of delta that are getting restless already.

Mon, 07/02/2012 - 21:53 | 2582405 DeadFred
DeadFred's picture

I've often wondered how happy the troops are with Captain 'O' and the thought of putting their lives on the line for Goldman, Exxon and Haliburton. Oops. Haliburton owned the last guy, who replaced them on the list?

Mon, 07/02/2012 - 19:35 | 2582148 daveeemc2
daveeemc2's picture

True that - in the mean time, the rest of us pussies have jobs.

But as soon as that changes, I for one, will join them.

To some in finance industry they are taken as an enigma.

I personally see them as early adopters  =)

I wish they would take a personal stake in the finance industry (aka buy a share) so they can go to board meetings and protest INSIDE the precious vs on the streets looking like hobo's.


Mon, 07/02/2012 - 19:46 | 2582171 LawsofPhysics
LawsofPhysics's picture

I agree, less "occupying" more "taking shit over", by any means nescesary.

Mon, 07/02/2012 - 19:54 | 2582189 SumSUN
SumSUN's picture

Boycotting fast food, and big box chain stores is something everyone can do.  That shit is shit.  Complete fucking garbage...

Mon, 07/02/2012 - 19:55 | 2582193 Kali
Kali's picture

They are leaving us no other choice. 

Mon, 07/02/2012 - 20:06 | 2582215 resurger
resurger's picture

"(aka buy a share) so they can go to board meetings and protest"

You are a cunning sharp man


Mon, 07/02/2012 - 20:16 | 2582236 marathonman
marathonman's picture

Only about 1% had a clue what was really wrong.  The rest of them were hopeless statists that just wanted more free stuff.

Mon, 07/02/2012 - 19:06 | 2582068 BennyBoy
BennyBoy's picture

Forcing is such an ugly word.

And truthful.

Mon, 07/02/2012 - 19:07 | 2582071 Cursive
Cursive's picture

I feel like we've all been given the "proverbial finger."

Mon, 07/02/2012 - 19:33 | 2582142 The Monkey
The Monkey's picture

Falling prices are un-American and dangerous to the economy, at least that is the thought that Bernanke's Fed has made ubiquitous.

ZeroHedge is considered dangerous for advocating free markets and liquidation. Ironically, these steps were once considered part of the natural economic cycle. Now they are considered financial terrorism.


Mon, 07/02/2012 - 19:09 | 2582073 midgetrannyporn
midgetrannyporn's picture

It was no big secret even back then. Fraud is cool in the usa.

Mon, 07/02/2012 - 19:24 | 2582117 cossack55
cossack55's picture

Don't forget extortion. It's like way cool, daddyO.

Mon, 07/02/2012 - 19:10 | 2582074 rosiescenario
rosiescenario's picture

The breaking news on the bankstas just gets better and better....on the one hand we have them fixing rates and on the other, fixing ratings.....they are a multi faceted group.

Mon, 07/02/2012 - 19:17 | 2582082 knukles
knukles's picture

Next thing is they'll be buying Washington, London and the whole of Switzerland.

Mon, 07/02/2012 - 19:10 | 2582075 Ineverslice
Ineverslice's picture

Hey Maria-

You might wanna go back and interview that guy one more time.  

Mon, 07/02/2012 - 19:11 | 2582078 Spigot
Spigot's picture

I can hear the crowds measuring out the ropes and tying fancy "knots", as well as setting up ladders that lead to low tree limbs.

This shit is worse than sewerage.

There is nothing to prevent the complete disrobing of all their communications in every type of financial transaction which may have been open to fraud.

These guys will hang.

Mon, 07/02/2012 - 19:14 | 2582080 El Oregonian
El Oregonian's picture

Such is our new life in a man-made bubble...

Mon, 07/02/2012 - 19:13 | 2582084 CoolBeans
CoolBeans's picture

Yet another example of a system that is corrupt to the core.

Mon, 07/02/2012 - 20:07 | 2582216 RECISION
RECISION's picture


Is it still a crime, if everyone is doing it?

Mon, 07/02/2012 - 20:32 | 2582264 CoolBeans
CoolBeans's picture

Yes. Yes it is.

But if you and I should do it...we'll go to prison because you and I are not part of the elite club.

Mon, 07/02/2012 - 19:17 | 2582091 PaperBear
PaperBear's picture

Oh yeah, baby, baby.

Let the general public see the criminal banksters.

Get that filthy laundry washed in public.

Mon, 07/02/2012 - 19:26 | 2582123 El
El's picture

Sadly, the general public could not care less. Tell someone about it next time you are at the grocery store and watch the glazed, blank stare looking back at you.

Mon, 07/02/2012 - 19:38 | 2582153 cougar_w
cougar_w's picture

The general public have stronger opinions on how contestants are rated in Dancing With the Stars.

Mon, 07/02/2012 - 20:28 | 2582257 CoolBeans
CoolBeans's picture

True that...which is why I avoid real conversation at the grocery store.  Too frustrating/scary.

Mon, 07/02/2012 - 21:56 | 2582412 Spigot
Spigot's picture

However, the real "public" for whom this news is of concern are all our overseas counterparties. And they are very interested in this due to having repeatedly losing huge sums of money to these scum...payback will indeed be a bitch.

Mon, 07/02/2012 - 19:16 | 2582094 Omen IV
Omen IV's picture

what markets, that the Banks participate in, are "not" rigged?

and ...why?

Mon, 07/02/2012 - 19:16 | 2582096 TulsaTime
TulsaTime's picture

WHOCUDDAKNOWD - let the power of free markets sweep you away, to an oasis of return and norisk.  Feel the warmth embrace you as your bonus swells beyond the limits of decency. 

This is FREE Enterprise...bitchez

Mon, 07/02/2012 - 19:18 | 2582102 knukles
knukles's picture

sounds like a morphine drip....

Mon, 07/02/2012 - 19:33 | 2582139 Wakanda
Wakanda's picture

I had a morphine drip when I passed a kidney stone and it was absolutely silent.

Mon, 07/02/2012 - 20:10 | 2582224 knukles
knukles's picture


Yes, they are quiet, are they not?
Placid, warm, comforting, in the arms of entirely benevolent pleasant specter of quiet and soothing calm.
Drifting on a warm stream.
No wonder the shits so bloody addictive.

Even sounds good......

I wonder what a morphine, thorazine and ativan enema would be like?



God, would be like the Cheshire cat for hours ;)

Mon, 07/02/2012 - 20:27 | 2582254 CoolBeans
CoolBeans's picture

Hate morphine.  Got a dose for pain and -worked great but vomited for hours on end.  Never again. 

Mon, 07/02/2012 - 23:40 | 2582642 Wakanda
Wakanda's picture

They gave me a drip with a button to push to increase the dose.  I pounded that button for all it was worth and they cut me off after 3 refills.  I'll never forget the look the PA gave me when I asked for the 4th bag of saline/morphine.  "No more for you..."  LOL  : )

Mon, 07/02/2012 - 19:16 | 2582099 nmewn
nmewn's picture


Mon, 07/02/2012 - 19:31 | 2582133 Wakanda
Wakanda's picture


Mon, 07/02/2012 - 19:17 | 2582101 resurger
resurger's picture

Rate the bitch based on "Guess Work"

I feel bad for Abudhabi Bank muppets, they didnt know that they are Fraud, next time contact:



                                                                                                                                                                                      Egan - Jones


Mon, 07/02/2012 - 19:19 | 2582103 Chartist
Chartist's picture

and those Morgan folks will be shocked, shocked I say, that folks will burn them at the stake.

Mon, 07/02/2012 - 19:31 | 2582134 algol_dog
algol_dog's picture

These guys better hope and pray that the end of world scenarios, so frequently pontificated on this site, never come to fruition, for there will be nowhere to hide and mob justice awaiting them if it does.

Mon, 07/02/2012 - 19:22 | 2582111 i_call_you_my_base
i_call_you_my_base's picture

They should have KPMG audit the process.

Mon, 07/02/2012 - 19:22 | 2582112 CosmicDebris
CosmicDebris's picture

There is a saying that goes something along the lines of (apologize for not having the quote) 'Most people don't knowingly do evil deeds...they just convince themselves with their own logic that what they are doing is just'.  Something like that. Someone please put the quote up if they know it.  I think it's by a Russian philosopher.  Anyway...are these people just evil or is there some reasoning to their madness, in their own minds, when they knowingly manipulate the system like this or in the multiple other harmful ways.  Crazy shit.  My vote is they are just evil, greedy bastards.  They should all hang for fucking it all up for the rest of us.

Mon, 07/02/2012 - 20:02 | 2582205 Bob
Bob's picture

I suspect there's more truth in that idea than we'd care to admit, but I say fuck it, we're not ever gonna be able to judge a man's soul . . . but we can still hang his ass for taking part in the crime.  Or conspiring to conceal it. 

Tough break, but riding with the wrong posse makes you guilty enough. 

It's God's job to sort out the souls if they have them. 

Mon, 07/02/2012 - 20:33 | 2582265 groundedkiwi
groundedkiwi's picture

Its like unprotecded sex. They know there could be consequences, but go ahead anyway for the pleasure of it all.

Mon, 07/02/2012 - 19:23 | 2582115 moroots
moroots's picture

Queue up another meeting of the Senate Banking Sycophants Committee to call John Mack before them and grovel at his feet.

Mon, 07/02/2012 - 20:06 | 2582214 Bob
Bob's picture

I feel certain that Issa will have his newly engaged committee getting to the bottom of this one.  Hey, it could be a two-fer against Holder for dereliction of duty. 

Yup, I have complete confidence about this one. 

They've been just oozing honor and indignation lately. 

Mon, 07/02/2012 - 19:23 | 2582116 chunga
chunga's picture

MS up 5% tomorrow.

Market breathes sigh of relief. Better than expected.

Mon, 07/02/2012 - 19:24 | 2582118 buzzsaw99
buzzsaw99's picture

From two years ago:


NEW YORK — Billionaire investor Warren Buffett on Wednesday defended credit rating agencies that gave overly positive grades to mortgage-related investments before the housing bust. He said the agencies were among many who missed warnings signs of the crisis.

"They made the wrong call," Buffett acknowledged...

Mon, 07/02/2012 - 19:36 | 2582149 cougar_w
cougar_w's picture

The Ministry of Truth has a lot of work to do these days. But don't worry they'll get around to "correcting" that one.

Tue, 07/03/2012 - 05:41 | 2582951 mvsjcl
mvsjcl's picture

They made the call they were told to make (and paid for). Criminality at all levels.

Mon, 07/02/2012 - 19:24 | 2582119 crawl
crawl's picture

Is MS the next Lehman?  Or is it too big to fail?

I say downgrade them by 2 notches and see what happens.  Oh wait, they are in bed with the rating agencies.

Mon, 07/02/2012 - 19:24 | 2582120 TMT
TMT's picture

Bullish for attorneys ... again.

Mon, 07/02/2012 - 19:25 | 2582121 Bitchin Bear
Bitchin Bear's picture

I know I will get lots of downers but isn't that supposed to be

blasé instead of blaze?  It's one thing for us great unwashed commenters to not be able to spell but contributors?  Come on.

Mon, 07/02/2012 - 19:49 | 2582179 James
James's picture

Yes. Absolutely. A mispelled word is my biggest problem.

Anal much?

Tue, 07/03/2012 - 05:47 | 2582952 mvsjcl
mvsjcl's picture

And the muppets were shot down in a blasé of glory.

Mon, 07/02/2012 - 19:27 | 2582124 nasa
nasa's picture

How do you explain doing God's work to the serfs? 

Mon, 07/02/2012 - 19:33 | 2582143 cougar_w
cougar_w's picture

You don't have to explain anything. It's God's work.

Mon, 07/02/2012 - 19:27 | 2582125 Catullus
Catullus's picture

I was just thinking: Gold and Silver don't need a lot of credibility. You either have it or you don't. 

Mon, 07/02/2012 - 19:30 | 2582130 HaroldWang
HaroldWang's picture

With Europe, the BBA, and virtually everyone shocked, shocked, that the global bank cabal schemed...

Europe was glowing bright green in pretty much all their markets today. Seems like they didn't give a shit either.

Mon, 07/02/2012 - 19:45 | 2582169 chump666
chump666's picture

It was the most retarded trading I have seen in a long time, pretty much reflects the general European mind-set - which is brain dead.

Asia will knock some reality into the markets (yes again).  Commodities sell, USD bids and the overall (bond/CDS/derivative) bidless trade is counting down.  Also, I would look at oil/gold bids + USD bids with equities selling = war trade i.e Iran

Mon, 07/02/2012 - 19:57 | 2582197 HaroldWang
HaroldWang's picture

Asia, well at least Japan, just follows the US markets like a little puppy dog.

Mon, 07/02/2012 - 19:31 | 2582132 world_debt_slave
world_debt_slave's picture

I had a chuckle over this "America appears relatively blaze" I was wondering was it "ablaze" until I read the line following, ah, blase, that makes sense.

Mon, 07/02/2012 - 19:32 | 2582138 cougar_w
cougar_w's picture

Take the red pill.

Mon, 07/02/2012 - 19:33 | 2582144 Timmay
Timmay's picture

Blame it on the auditors....

Mon, 07/02/2012 - 19:40 | 2582158 Everybodys All ...
Everybodys All American's picture

I can't wait for Obama and Eric Holder to go after those guys. I can imagine the FBI is about to go after them as an organized criminal enterprise and will likely prosecute the under the RICO act.

After all he did'nt get elected to bailout some fat cats on Wall Street.

Yeah right.

Mon, 07/02/2012 - 19:42 | 2582159 world_debt_slave
world_debt_slave's picture

the granddaddy of them all, the Federal Reserve, has been swindling and screwing the masses for 100 years and empowers the rating agencies and banks to be accomplices to this criminal banking cartel.

Cut the head off this snake and you would see the rest of the body die.

Mon, 07/02/2012 - 19:50 | 2582182 gatorengineer
gatorengineer's picture

Five plus ones for you.........  Couldnt have been said better.

Mon, 07/02/2012 - 19:53 | 2582187 world_debt_slave
world_debt_slave's picture

thank you, Happy 4th of July fellow ZH'ers!

Mon, 07/02/2012 - 20:22 | 2582206 Kali
Kali's picture

A happy 4th for me would be if we do declare our independence and hang these mothas.  Enough!  If not, we should rename it pussy debt slave day. 

Or maybe a traditional BBQ with Pig Banksters the main dish on the spit!

Mon, 07/02/2012 - 19:57 | 2582196 Rearranging Dec...
Rearranging Deckchairs's picture

How much you want to bet that any training for the rating agencies and indeed all of Wall Street's analysts now include a segment regarding not putting anything like this in email and rather saving it for face to face discussions or telephone conversations?



Mon, 07/02/2012 - 20:43 | 2582237 Bob
Bob's picture

Yeah, life in morally responsible corporate America.  Not only will it be reemphasized in the training, but employees will be specifically informed that "violation of this and all company policies may lead to termination and other applicable penalties under law" in the Honor Policy they are forced to sign. 

They'll spin it off as if it couldn't happen unless people were saying "inappropriate"  things in email, then attack that behavior as if it will solve the actual problem, threaten punishment of those who do not properly adhere to the "solution", and document that they gave it their all to correct all the "confusion and misunderstanding" that allowed these awful things to happen. 

"If they happened", which I doubt they'll ever admit. 

Your Honor Pledge aknowledgment gets attached to the many sheets of attestations that you've read and understand the thousands of policies and procedures you're unmistakably expected to sign off on without reading when you either hire in or get "refresher" training.

It's how corporate corruption gets papered over as a deep commitment to ethical behavior.  We don't talk about it, but most of us see it going on at work, regardless of the setting.

Mon, 07/02/2012 - 19:59 | 2582201 onlooker
onlooker's picture

Sunday morning “discussion” programs yesterday discussing Obama care and other things brought up an excellent bit of wisdom. In the discussion about Holder and the gunrunning to Mexico program that Holder has stonewalled about, there was this comment from the left. “ Holder has not put some of the $6000 Wall Street suits in jail, and that is why people are angry”. At least he was partially right.

While the too big to fail has been applied to banks and GM and and and Spain and and, IF we look at the trees and the forest at the same time, real World USA 2012 appears to be a society of criminality that is TOO big to eliminate before it totally destroys ------ and at this point, indigenization and worst case projections appear to be naive.

Our country has cancer. It is in process of killing off the structures, concepts, economy, and enforcement of laws and regulation.  If this cancer is not removed and eliminated it will do  what cancer does to all that host it. It kills the host.

Mon, 07/02/2012 - 20:03 | 2582209 rsnoble
rsnoble's picture

Looks to me the host is on life support with a almost 0% chance of recovery and death will immediately result from the withdrawl of support.

Mon, 07/02/2012 - 20:01 | 2582204 rsnoble
rsnoble's picture

Anyone with a good knowledge of charts "and" patterns can easily see why sp 400 is in the cards.

Thing can the technicians that the FED hires and they are desperately trying to avoid it. So far they have one the small battles. However after trillions and trillions and lies lies lies and more lies.........the big macro chart is still in full play with a high% chance of playing out.

They haven't changed anything except putting a flimsy bumper guard at the edge of the abyss and a few twigs to grab onto on the way down.

There were clearly better choices to spend gazillions on but saving a half dozen rich bankers was all they could manage to do, and temporarily at that.

It's my theory they are aware of all this, enter NDAA, 30,000 drones etc etc etc.

Mon, 07/02/2012 - 20:40 | 2582270 rsnoble
rsnoble's picture

Sometime I think if I proofread my writing I might get taken more seriously. LOL. Fort there's not too many spelling fanatics on this site.

Mon, 07/02/2012 - 20:04 | 2582211 Xibalba
Xibalba's picture

what they're really gonna rig is the US elections

Mon, 07/02/2012 - 20:10 | 2582227 Kali
Kali's picture

there's gonna be elections?

Mon, 07/02/2012 - 20:05 | 2582212 working class dog
working class dog's picture

Appoint Professor Black as special prosecuter and bookem .

I wonder if Bain Capitol was involved in any of this stuff?

remember corporations are people too!

Mon, 07/02/2012 - 21:47 | 2582392 luckylogger
luckylogger's picture

I was wondering the same thing, it is possible , if he is a real man and not a transvestite, and he really cares about the country that he will kick their ass. As we know he cannot claim ignorance.

Mon, 07/02/2012 - 20:09 | 2582223 working class dog
working class dog's picture

Remember what we are celebrating on the fourth of july,

The day  our forefathers made up a piece of paper saying to the world corporations are not people, and the colonists hereby proclaim the right to tell the Central Bank of England, the King and Queenl, along with the Rothschilds, India East Company etc. etc. 


Mon, 07/02/2012 - 20:13 | 2582230 Cosimo de Medici
Cosimo de Medici's picture

Very simple.  If your Number 1, Number 2, or Number 3 campaign contributors broke the law.....then the law must be wrong.  Let us, on this July 4th, celebrate our self-correcting system of checks and balances.

Mon, 07/02/2012 - 20:18 | 2582241 bnbdnb
bnbdnb's picture

Libor now in focus, HFT getting scoped, and bribery in the ratings agencies. Is there really any hope for change yet?

Mon, 07/02/2012 - 20:21 | 2582245 marathonman
marathonman's picture

So what will the Arabs accept in return when they win the lawsuit?  Dollars or gold?  The dollars will have to be hypothecated from American 401K accounts to cover the Arabs' loss.

Mon, 07/02/2012 - 20:28 | 2582255 Cosimo de Medici
Cosimo de Medici's picture

Give them Manhattan and let them impose Shari'a Law.

As it says in Sura 149, "For Ye that browbeat the Ratings Agency, let the Just Man cut him off at the brow".

Mon, 07/02/2012 - 20:37 | 2582267 Miss Expectations
Miss Expectations's picture

Lapo Guadagnuolo, thanks for trying. 

Mon, 07/02/2012 - 20:44 | 2582276 MrBoompi
MrBoompi's picture

These crimes dwarf the forgery and securities fraud that surrounded the housing debacle. 

Mon, 07/02/2012 - 21:02 | 2582310 Seasmoke
Seasmoke's picture

Lou Mannheim: Man looks in the abyss, there's nothing staring back at him. At that moment, man finds his character. And that is what keeps him out of the abyss.

Mon, 07/02/2012 - 21:03 | 2582314 genr8n
genr8n's picture

Holy Crapoli Batman - wait a minute, these are only allegations (like those against J Travolta). 

These things get serious if there is an actaul judgement (in two years, after appeals) however that doesnt happen if the matter settles out of court for an undisclosed sum (....yeah, you got me this time .... here's some of your money back).

Mon, 07/02/2012 - 21:16 | 2582328 lostcause
lostcause's picture

 As long as thier bellies are full and eyes distracted nothing will change.

Mon, 07/02/2012 - 21:27 | 2582348 DelusionalGrandeur
DelusionalGrandeur's picture

....and the bankers and their circle jerk buddies rewrite the meaning of "cake and sodomy." What more does the public need to be absolutely outraged? These deplorable oxygen thieves need to be publicly executed. If the regular public steals something they go straight to the for-profit prison system. If a banker or his buddies steal from everyone else, they get wrist-slapped, if anything, then start the next day, business as usual. It's getting more and more difficult to be proud to be an American. The corruption runs so deep permeating every alphabet circle jerk agency the light at the end of the tunnel is almost non existent. I just don't get it anymore.

Mon, 07/02/2012 - 21:27 | 2582349 q99x2
q99x2's picture

Probably starting to cost the elite out of pocket money to keep the social welfare going enough to prevent an uprising and they've had enough.

My I-Ching says August is when the SHTF.

Mon, 07/02/2012 - 21:29 | 2582354 Itch
Itch's picture

"Fed manipulates capital markets, HFT manipulates bid ask spreads, "self-policing" CDS pricing market groups fudge the prices on trillions in Credit Default Swaps, bank cabals collude and manipulate short-term interest rates, and now banks are confirmed to have manipulated the ratings on tens of billions of bonds using monetary incentives and threats. "

...but dont they still cherish and respect us as citizens, because we're all special little democracy unicorns, and the lazerbeams of love shall shine from our eyes and banish the darkness in their hearts? SCREEEEECH(sound of needle comming off the record), jail the useless motherfuckers. 

Mon, 07/02/2012 - 21:29 | 2582356 gwar5
gwar5's picture

It's all fascism, pure and simple.  Fascism is the merger of state and corporate interests. The banks and financial industry are the biggest component of the economy and are running the state, and picking the winners and losers. We are all losers.



Mon, 07/02/2012 - 21:43 | 2582379 Tsar Pointless
Tsar Pointless's picture

Wait a minute now. I thought it was socialism. Or communism. You know, those terms are interchangeable, or so I'm told by those who don't understand or know the difference between the two.

You mean to tell me it's fascism? That Amerikkka was fascist before fascism was cool?

Say it ain't so, Joe - er, gwar5!

BTW - isn't there some nationalist holiday this week, that requires people to wave flags and sing stupid patriotic songs, all while watching fireworks and eating fattening food?

Oh, the nationalist distractions never cease around here.

Mon, 07/02/2012 - 21:54 | 2582406 supersajin
supersajin's picture

Don't's all "priced in the markets" already!!

Nothing will happen until the American sheepole demand justice. Unfortunately 90% of us are too fat, lazy, stupid and comotose from eating HFC, fast food and poppin doctor's pills daily to give a damm. 

I thinks the Mayan's should have founded a hedge fund..December 2012 puts lookin pretty good these days!!

Mon, 07/02/2012 - 22:15 | 2582456 Whiner
Whiner's picture

Okay. All we gotz to do is learn how to play in a corrupt system. So start a satanic investment cult and offer the soul of a member for a satanic sign of what to short or arb etc. Get a voodoo priestess out of New Orleans or better, Barbados. She will make little Dimon, Bernanke, Geitner, Blankfiend dolls to work wit the chicken entrails. 100% gains per day.

Mon, 07/02/2012 - 22:16 | 2582459 overthehill
overthehill's picture


Mon, 07/02/2012 - 22:23 | 2582480 slewie the pi-rat
slewie the pi-rat's picture

this was like reading the policeGazette

very naughty stuff

i predict within two weeks we get annCoulter telling us in no uncertain terms that anybody who believes in a conpiracy of 250,000 people to rig markkets is crazier than slewie

that will be the signal to start shooting, BiCheZ!  L0L!!!

Mon, 07/02/2012 - 22:34 | 2582502 monad
monad's picture

I bet they are very happy now that they built all those extra prisons, and hired enthusiastic sadists who work cheap just for the opportunity.


Tue, 07/03/2012 - 01:28 | 2582793 Marty Rothbard
Marty Rothbard's picture

This is fraud, clear and simple, on the part of Morgan Stanley, and of the ratings agencies mentioned.  OK justice department, get to work, and don't forget the actual people who did it, not just the corporations. 

Tue, 07/03/2012 - 08:41 | 2583247 Bob
Bob's picture

Interesting that Holder finds his ass in a congressional sling only days before a tsunami of evidence of corporate crime rolls in. 

I have no doubt he would ignore it in any case, but what are the odds that if he didn't Issa and his buddies would scream about Holder being a political opportunist conveniently seizing the chance to put himself in a different light while serving Obama's socialist agenda by attacking Wall Street, the mecca of job creators?

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