Morgan Stanley could do little but watch as a team of advisers overseeing $2.2 billion in assets quit last month to start their own shop, the latest in a string of departures that have shifted billions of dollars in assets away from big Wall Street banks.
After months of secret and meticulous planning, 13 employees in Wichita, Kansas, left on a Friday with phone numbers and e-mail addresses for 800 clients, and then spent a frantic weekend on the phone trying to get them to switch to their upstart. It all depended on a gift from Morgan Stanley: Years earlier, the bank had signed away its right to sue.
Morgan Stanley has shaken up its trading business.
The bank has put Sam Kellie-Smith, who used to run global equity trading, in charge of fixed income and commodities.
One way to read this? In appointing a stocks specialist to run bond trading, Morgan Stanley is making clear where its focus lies.
While it’s the latest new thing to vilify public employees and their pensions, this little known and understood threat is doing just as much damage:
In 2002 a little-known but powerful state agency in California and Wall Street titans Morgan Stanley, Citigroup, and Ambac consummated one of the biggest deals to date involving … an “interest rate swap.” A year later the executive director of the Bay Area’s Metropolitan Transportation Commission, Steve Heminger, proudly described these historic deals to a visiting contingent of Atlanta policymakers as a model to be emulated.
Because of the economic collapse, and the decline of interest rates in 2008 to virtually zero, the MTA has been forced to pay the amazing sum of $658 million in net swap payments so far.
Lowering interest rates to zero isn’t Fed policy, it’s Wall Street policy – Ed.
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Tagged banks, business, CALPERS, credit default swaps, Depression, derivatives, economy, ethics, financial crisis, financial institutions, funding, Goldman Sachs, meltdown, morgan stanley, pension funds, people hate banks, Recession, They are all a bunch of bastards