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Rare Earths, Reality, and High Finance

|Includes: LYSCF, MS

Mitsubishi(OTCPK:MSBHY) and Lynas(OTCPK:LYSCF), A Love Affair or a Divorce from the dollar?


This morning my Google filter caught the following story abstract from Industrial Minerals, which can be found at I am not a subscriber to IM, so I have only the above abstract, but I am intrigued by what I believe it really implies, and I am really intrigued by the fact that the story abstract does not mention some very real implications here. It seems to me that:

1.       Mitsubishi would right now rather have a bundle of securities, 25% of which is in Lynas shares, than a claim on US Dollars, and

2.       Morgan Stanley (NYSE:MS) would rather let go of a substantial stake in Lynas than give up cash

What I see here as a logical consequence of my view of these actions is that Morgan Stanley believes it can get no further added value from its Lynas sate, and that Mitsubishi would rather have securities than a right to a fixed amount of American currency.

Either the author of the IM article or I may be guilty of the logical fallacy called post hoc propter hoc, which is Latin for “After this, (therefore) on account of this.” It means that you cannot assume that an event that follows another event in time is necessarily caused by that prior event.

I think it just as likely that Mitsubishi and Morgan Stanley have the views I expressed above as it is that this transaction was driven by a desire for Mitsubishi to acquire shares in Lynas.

No matter what however I’d like to know why Morgan Stanley did what they did. Mitsubishi, it seems to me, got the best of the deal, unless Morgan Stanley knows something we don’t.

Please, if anyone has read the IM article fully tell me if I am off track here.