No honor among thieves I guess. Trash each other, and I want front row seats with popcorn when they start eating each others throats..
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Submitted by Tyler Durden on 06/26/2012 08:16 -0400
Capital Markets
Conviction List
Counterparties
fixed
Market Share
Morgan Stanley
ratings
Real estate
GS just did what it does best: pulled the rug from under its most troubled peer: "We are downgrading MS to Neutral and removing shares from the America’s Conviction List. Since being added to the Americas Conviction List on January 29, 2012, MS shares are down 27% vs. flat for the S&P 500. Over the past 12 months, MS shares are down 39% vs. the S&P 500 up 4%. When we added shares to the Conviction List, we noted that MS had addressed a number of legacy issues including (1) the conversion of the MUFG preferred stock to common to bolster common equity capital ratios, (2) elimination of the CIC preferred dividend, (3) removal of the MBIA relationship//hedge overhang, (4) write-down of legacy real estate assets, (5) elimination of non-core asset management businesses, and (6) near-completion of the integration of Smith Barney and Morgan Stanley Wealth Management. While that all still holds true today and should be beneficial towards long-term “normalized” returns, we believe several capital market overhangs will reduce out-year earnings visibility and cap near-term outperformance. While too soon to tell how counterparties will react to a new capital market ratings distribution post-Moody’s, this cycle has proven that banks with the largest increase in funding spreads have generally lost fixed income trading market share. In addition, with a number of global macro uncertainties likely to weigh on capital markets activity for the foreseeable future, MS has outsized exposure here as well....we are lowering our 12-month price target for MS to $16 (from $20) based on 0.6X TBV (from 0.7x) to reflect challenged near-term earnings power."
Capitalism at its best: kick 'em while they're down.
Goldman summary:
http://www.zerohedge.com/news/goldman-downgrades-morgan-stanley-conviction-buy-netural-warns-counterparty-risk?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
LMAOOOOOOOOOOOOOOOOOOOOOOOOO
blindfaith
blindfaith's picture
Ya think, GS took out a big short position before the 'timely' release?
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Tue, 06/26/2012 - 08:34 | 2561067 Biosci
Biosci's picture
They've had the big short position since the 'buy' recommendation.
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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