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Wed Jan 23, 2013, 11:32 PM

Explosive Charge: Morgan Stanley Peddled Security Its Own Employee Called ‘Nuclear Holocaust’

Explosive Charge: Morgan Stanley Peddled Security Its Own Employee Called ‘Nuclear Holocaust’
by Jesse Eisinger
ProPublica, Jan. 23, 2013, 12 p.m.19

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On March 16, 2007, Morgan Stanley employees working on one of the toxic assets that helped blow up the world economy discussed what to name it. Among the team members' suggestions: "Subprime Meltdown," "Hitman," "Nuclear Holocaust," "Mike Tyson's Punchout," and the simple-yet-direct: "Shitbag."

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The results are explosive. Hundreds of pages of internal Morgan Stanley documents, released publicly last week, shed much new light on what bankers knew at the height of the housing bubble and what they did with that secret knowledge.

The lawsuit concerns a $500 million collateralized debt obligation called Stack 2006-1, created in the first half of 2006. Collections of mortgage-backed securities, C.D.O.'s were at the heart of the financial crisis.

But the documents suggest a pattern of behavior larger than this one deal: People across the bank understood that the American housing market was in trouble. They took advantage of that knowledge to create and then bet against securities and then also to unload garbage investments on unsuspecting buyers.

MORE:
http://www.propublica.org/thetrade/item/explosive-charge-morgan-stanley-peddled-security-its-own-employee-called-nu

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Reply Explosive Charge: Morgan Stanley Peddled Security Its Own Employee Called ‘Nuclear Holocaust’ (Original post)
kpete Jan 2013 OP
Mnemosyne Jan 2013 #1
HiPointDem Jan 2013 #2
OneTenthofOnePercent Jan 2013 #3

Response to kpete (Original post)

Thu Jan 24, 2013, 01:03 AM

1. K&R nt

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Response to kpete (Original post)

Thu Jan 24, 2013, 05:59 AM

2. kr. surely there is enough information to jail these shitbags.

 

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Response to kpete (Original post)

Thu Jan 24, 2013, 06:51 AM

3. If you have sound knowledge (predictions) about the state of a security and you act on it...

 

Isn't that just sound investment (or devestment)? So long as the knowledge and actions weren't based via of inside trading, it would fine right? Im not an investor, I don't know SEC laws.

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