By Dominique de Kevelioc de Bailleul
Knowing the financial system will never recover following the derivatives blowup at Bear Stearns of 2008, the next bank-broker-dealer intentionally slated by the Fed to collapse as the next bad bank is Morgan Stanley, according Hat Trick Letter publisher Jim Willie.
The evidence of the coming “killjob” on Morgan Stanley appears to jibe well with Willie’s thesis, but only an analyst who naturally doubles as detective with a flare for nailing down the criminal profile of the syndicate leaders earlier than most can also see what others may wrongly regard as paranoia.
“Morgan Stanley put on $8 TRILLION in interest rate swaps in the first half of 2010,” Willie explained to readers of bullion dealer SilverDoctors. “I call them the designated hitter for Wall St. Why wasn’t it JP Morgan, BOA, or Goldman Sachs? My theory is simple: THEY EXPECTED LATER TO KILL MORGAN STANLEY!”
Could the resignation of Morgan Stanley CEO John Mack in September of 2009 following the height of the March 2009 meltdown serve as a clue to the banking cartel’s plot? Maybe Mack abruptly left the firm after receiving word from the NY Fed of his coming role as a placeholder for the Eccles boys who had plans to go completely rogue to the dark side.
That’s speculation, of course, and so is Willie’s latest supposition—but considering the mounds of obvious criminal activity riddled throughout the global financial system, revealed to the world following the fall of Lehman Brothers, and the sudden drop of the monicker ‘Crazy’ Jim Willie by the goldbugs when referring to him and his ‘crazy’ theories, reporting the next likely fraud by the bank cartel has turned into a lucrative cottage industry, led by Jim Willie, Max Keiser and the folks at GATA.
It turns out that there’s nothing more popular than true crime stories, and Willie’s analysis of the motive behind the scheme certainly dovetails nicely into what all good money managers and correctly-trained economists now know: the bond market wags all dogs, but lately something isn’t right.
Since the monster-size monied participants of the yield curve game attract the smartest and most staid of the lot of this otherwise filthy financial industry, the bond market, in the past, got it right far more many times than the ‘vigilantes’ got it wrong. But has happened to the bond vigilantes? Willie explains.
“Morgan Stanley created the false impression of a flight to safety in U.S. Treasury bonds,” states Willie. “Take a look at the 10 year yield early in 2010. It was moving up to the 3.5% range! Alarm bells were going off!
“They were talking about QE and bond monetization by the Fed! China was backing out of buying treasury bonds! We had more supply, and less demand, and a rising 10-year yield. Suddenly we had a tremendous ‘flight to safety’. What a bunch of propaganda!”
But the risk to investors beyond a collapse of asset prices of equities and real estate can now include cash—once considered a risk-less asset. Not anymore, according to Willie, and the failure of a big Wall Street fixture will wake the public up to the risks of holding any asset besides bullion (in your hand or storage outside of the banking system) is coming, and that firm will be Morgan Stanley.
“No one is protesting against these big banks for stealing from these segregated futures accounts. It’s because they’re futures accounts! The point is they’re segregated private accounts, and in bankruptcy law they are first in line during bankruptcies!!
“This is very big, and I expect we’re going to see a jump into private brokerage accounts. It doesn’t look like it’s going to be Merrill Lynch, it looks like it could be Morgan Stanley.”
Willie expects segregated accounts at Morgan will go the way of Sentinel—into the black hole. Holding bullion is the last refuge to the U.S. investor.