BEHOLD: The Gurus at Morgan Stanley Have Unveiled Their Post BREXIT Buy List

You should all take notice now and heed their CFA level 3 expertise.

I’m especially bemused by their gutsy calls to buy both FB and AMZN.

It was just Friday when Carter Braxton Worth made an impromptu visit to the CNBC studios, harried from his summering festivities in Nantucket, to warn the world to be fearful of the market, to not use the minor decline as a reason to buy more stocks. Today, after a few bloody marys, Braxton unveiled his checkered pants basket of stocks, which he feels is a buy down here, now that the market went down for two days. He even went as far to embarrass himself by drawing imaginary trend lines on stocks which have clearly broken, the fuck, down.

This is typical Wall Street marketeering, trying to have cake and eat it too. Carter is either unaware of his actions, perhaps distracted by his flailing golf swing, or is simply insane.

You decide.

Skynews is reporting that several major British banks have been informed of an imminent credit downgrade, post BREXIT.  Moreover, the forecast will be, inexorably, bleak, as Moody’s swashbuckles their outlook to ‘negative’.

If forced to guess, I’d say BCS, RBC, HSBC and LYG will endure the lion share of the post BREXIT wrath. As you can already see, the establishment is quite perturbed over these developments and endeavor to make this a very onerous experience for the Isle of Great Britain.

This is fairly boiler plate jargon by this tool at BofA/Merrill. Essentially, the UK is doomed for at least 3 quarters and the rest of the world is in for a very severe beat down, should any other freedom loving lads in Europe move to separate themselves from the fascist regime of the EU.

The billion dollar question is, which has been asked for hundreds of years during market spells, are these buying opportunities or a red flag for further pain to come?

FINANCIALS: LYG -32% RBS -32% BCS -32% GNW -21% PUK -21% LAZ -21% FDC -21% EVR -19% IVZ -19% CS -19% ING -18% VOYA -18% LINC -16% SAN -16% SCHW -16% DB -15% BASIC RESOURCES: WLL -28% HBM -19% AKS -19%  HUN -18% MT -17% ATI -17% OAS -17% CRZO -17% EPE -16% CF -16% BTE -15.5% SM -15% CONSUMER GOODS: BWA -20% KS -20% TEN -17% LEA -16.5% COT -16.5% PVH -16% AXL -16% THRM -16% OI -15.8% WBC -15.7% FCAU -15.5% DLPH -15.3% TSE -15.2% DAN -15.1% HEALTHCARE: EBS -30% ACAD -19% AGIO -18% VRX -17% PRTA -17% INDUSTRIAL GOODS: ATU -20% X -17% RXN -16% TGI -15.7% MCRN -15.3%  SERVICES: LBTYA -22% MAN -20% GWR -18% XPO -17% AER -17% KFY -15.7% TECHNOLOGY: AV -25% GSAT -20% BT -20% IPHI -18.5% TI -17.6% YY -17.5% ACIA -16.2% ANET -16%

Having fun yet?

The cheery folks out of both Morgan Stanley and UBS are telling clients to fear the end of the BREXIT blade, for comes with it is an undeniable storm that is bound to rip credit markets to pieces. They’re talking corporate credit here, the type of sordid horseshit that almost tipped over in February of this year–only to revive with the uptick in crude.

“Despite the urge to step in and buy U.S. credit at modestly wider levels than a few days ago, we recommend patience,” Morgan Stanley strategists led by Adam Richmond wrote in a note to clients Monday. “While the full impact of the U.K. leave may not be known for some time, the U.S. economy is not in a position to withstand a large shock.”

High yield debt has been widening–because they truly do suck. More than that, the vast majority of it is in the basic resource space–a sector of the market which has enjoyed the lionshare of gains since the March lows.

According to Exodus, there is upwards of $150 billion in distressed basic resource debt. But right behind it is another $450 billion, which will become distressed should their share prices continue to slide. In other words, the BREXIT issue, although concerning, pales in comparison to the type of ripple effect a large scale credit event in the oil and gas space could impose.

UBS’s Stephen Caprio is advising investors to resist deploying new cash to buy bonds on the cheap for now as Brexit increased the likelihood of a U.S. recession to 34 percent. That along with a stronger U.S. dollar, low oil prices and banking sector stress could upend vulnerable credit markets. In that case some high-yield and investment-grade companies may struggle to access debt markets, according to UBS.

“We do not believe investors should be buying Friday’s dip in credit yet,” Caprio wrote in a note to clients. “It is not often that an exogenous shock has hit so late in the credit cycle with central banks already at the zero bound.”

The U.S. economy and company creditworthiness are already weak enough that it may not take much to spark a deeper sell-off in corporate bonds, according to Morgan Stanley’s Richmond.

There were signs economic risks were rising even before the Brexit vote: U.S. corporate profits are down 15.5 percent from a peak in the fall of 2014 and business investment has deteriorated, Richmond wrote.

What’s more, companies — even large blue-chips — are about the least creditworthy they’ve ever been as they’ve borrowed rampantly in the face of weak earnings, according to Morgan Stanley.

“A catalyst is here,” Richmond wrote. “The worry that global growth is weakening and central banks can’t do much about it, which was prevalent earlier this year, won’t be far behind.”

There you have it, folks. The BREXIT vote has created an environment that is onerous to the increase of crude prices. In turn, there is an increased likelihood of a large scale credit event in the oil and gas space, one that is teetering on the brink of destruction. Should this occur, a recession is all but a forgone conclusion.

I haven’t even mentioned China in this post, something we’ll leave for another article.

If you tried to be more condescending than Mssr. Moritz Kraemer, Chief Sovereign Ratings Officers at S&P, you could not. In a somewhat high strung interview, with the BBG hosts hammering Moritz for the reasoning behind the downgrade, the S&P company made one thing indelibly clear: they are in the business of affecting political change via pressuring governments to bend the knee to their will–which is the same as the globalist, oligarch, elite.

S&P cut the UK two notches to AA, citing political uncertainty and an increased funding risk for British institutions, because of BREXIT.

Listen to the tone and tenor of this empty vessel. The EU has every intention of being punitive to the UK, punishing them for not agreeing to be their subject.

I found it ironic that the chief sovereign ratings officer happened to be a German national. This downgrade, like the one given to the US, is pure politics.

Markets are clinging to the lows of the day. For months you were subjected to torture here at iBankCoin, forced to read news items that spoke to a storm on the horizon, one that promised disaster. Le Fly was adamant about his bearish position, a stance not taken since before the credit crisis (yes, I called that too). Some of you went out of your way to email me, discussing how annoyed you were with me and that my forboding commentary weighed on your delicate conscience. You just wanted to read pleasant things, because, well, the world was your oyster and you enjoyed shucking in it.

After two days of tumult, and -30% drops in a myriad of stocks, finally, you’ve found religion. NOW you believe me, at least until the markets uptick and you are provided another life line.

The funny thing about this drop, it isn’t even the reason why we’re gonna fall hard. Oh, you thought I was in bonds and gold because England was destined to leave the UK? Pfffff.

Go dig deep into my archives from January and February of this year and read about some of the real reasons to be scared, stemming from China and the complete collapse of the EU.

BREXIT was the tipping point, the salient moment in time when everyone stopped doing lines of blow, stood up and paid attention to the world crumbling around them. Traders felt a sense of danger, a mortality if you will, and began to sell.

We know how these squalls play out. Selling begets more selling, until the facade which was hiding the true hideous face of this market is exposed and then panic sets in.

Others will wonder why no one saw it coming. But you will remember and rue the day you stopped listening to the one who knew, the crazy man aboard the ark.

Now go in peace. The sermon has ended.

Note: my gameplan for this tape is up in the Exodus blog now.

Shares are getting fucking harangued again. After dropping by 13% on Friday, FXCM is off another 9 today, based on suspicions that the company is getting gorilla raped on a sundry of fucked forex trades.

You’d think the extra volume in FOREX would help business. But anyone who knows FOREX and the boiler room culture at many of these firms understands that these people are morons of the first magnitude. I am sure as FOREX moves rattle through factors of standard deviations, accounts are getting zeroed out and swimming into negative equity.

Via Briefing

10:24 | FXCM | (7.62 -0.77)
FXCM follow-up: Forex broker FXCM seeing notable weakness today; down 9% today and 13% in past two days post-Brexit
As mentioned on Friday morning, forex broker FXCM was a name to watch on currency volatility after the British Pound saw a record move.

FXCM issued a statement on Friday morning, noting that FXCM systems and operations functioned without any material adversity during Brexit. This statement helped the stock recoup its initial losses on Friday.

However, FXCM stock has weakened again today, currently lower by 9% with continued volatility in the currency market.

As noted, FXCM was severely impacted by FX losses following the Swiss National Bank announcement of early 2015.

We’re all programmed to believe where there’s smoke, there’s fire. Well, this stock is smoking now.

The contagion is spreading. Board the ark. Save yourselves from an unseemly demise.

The carnage in the European banking sector is very reminiscent of the financial collapse of 2008, judging purely from price action. That sickness is spreading like wild fire, hitting US banking institutions with vigor.

Shares of LAZ are of particular interest to me, as well as EVR, BAC and C. These stocks are behaving like something terrible is on the horizon, or someone just got entangled in a horrible margin call.