New Dog. Old Tricks..

October 3, 2011 § Leave a comment

Admitting this from the start, I knew nothing of the MDQ.

Those letters short for Morally Depleted Quicksand.

Yet, most strangely, the accompanying material which contexted the term, contained several amusing strains.. that, as time shall tell sooner rather than later, could turn out more annoying than amusing. To the parties concerned.. of course.

Lucchetti ran a piece in the WSJ recently.. seeking explain how Morgan Stanley stock took a mucho hit Friday last. Dropping almost 10.5 percent. He wrote:

The concern with Morgan Stanley stems from its small size relative to other global financial firms and its reliance on debt markets, rather than customer deposits, to fund its business.

Most illuminating. Particularly when one knows how their debt business relies on derivatives.

Fact: Morgan Stanley has circa $56 trillion derivatives outstanding.

Background: A whole heap of those are in France.. remember..? and how French banks own a heap of Greek assets and liabilities, their banks holding mostly Greek sovereign… due for a bigger than 50 percent cut

So now you know why Geithner visited Europe.. trying for European coverage.. would be a fair bet. And no way! a matching answer known unto the trading priesthood of Friday’s MDQ.

So, okay, who deals with MS?

Most of Wall Street, that’s who.

But wait, there’s more.. as friends at the MoneyGame said:

Yeah, the most threatened banks on Wall Street are now those that don’t have a direct grip on your cash. And/or are in bed with France’s financial system. Which sleeps with Greece, which sleeps with Bulgaria and Albania and Romania.

This whole thing sheeting home a lesson, if nothing else, in how MDQ is the direct product of so-called derivatives risk management

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