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Does one hand know what the other is doing at Morgan Stanley (MS)? On Monday, the firm issued...

Does one hand know what the other is doing at Morgan Stanley (MS)? On Monday, the firm issued this call: Get Long Emerging Markets for the 39% Rally, China's Soft Landing Will Be Dandy. On the same day, it said this: Recession Likely, Sell Stocks and Risk Assets, Overweight Cash and Bonds. Which Morgan Stanley should we listen to?
Comments (6)
  • jschroe36
    , contributor
    Comments (66) | Send Message
     
    I prefer the latter MS.
    16 Nov 2011, 12:04 PM Reply Like
  • bankingqueen
    , contributor
    Comments (135) | Send Message
     
    MS=House of cards.
    16 Nov 2011, 12:05 PM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
     
    There's no conflict here. In the second piece, the beginning paragraph:

     

    "The odds of recession in the US and
    the rest of the developed world are
    uncomfortably high. So, on Oct. 6, we
    moved to an overweight position in safe
    havens and an underweight position in
    risk assets."

     

    So the developed world looks like a mess, emerging markets look poised for a soft landing. Risk off in the former, risk on in the latter. It seems the main point of confusion is the formerly associated "riskiness" of emerging markets, which, when compared to developed markets, all of a sudden looks a lot less risky. It would be interesting to see exactly why they think emerging markets are poised to outperform, given the interconnected, globalized marketplace.
    16 Nov 2011, 12:08 PM Reply Like
  • bkpark
    , contributor
    Comments (325) | Send Message
     
    Just a stab in the dark: recession in the developed world could mean consumers would continue to prefer cheaper goods, which tend to be produced in the emerging markets, so a recession in the developed countries (... so long as it's not accompanied by yet another full-blown financial crisis) might not mean as big a hit on exports by emerging market countries.
    16 Nov 2011, 12:15 PM Reply Like
  • Michael Filighera
    , contributor
    Comments (447) | Send Message
     
    Who's on first ---- that's correct ---- What's correct --- no he's on second -- Who's on second -- no he's on first -- Who's on first -- that's right -- Wait a second, if who's on first, what's on second, who is on third --- I don't know -- you don't know -- that's right I don't know is on third --
    16 Nov 2011, 12:08 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3332) | Send Message
     
    Anybody that follows recommendations by a firm that also trades equities for their own book, is a fool.

     

    Has anybody learned anything?
    16 Nov 2011, 12:35 PM Reply Like
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