Who needs inflation TIPS when you can have the filet?
Posted by: admin in Uncategorized, tags: Bernie Madoff, bonds, inflation, inflation protected notes, Morgan Stanley, safe investments, Smith Barney, TIPSMorgan Stanley
Senior Floating Rate Notes due 2012
Non-Callable U.S. Inflation Index Linked Range Notes
| Issuer | Morgan Stanley |
| Ratings | A2/A |
| Issue Date | January 23, 2012 |
| Price | 100% ($1000) |
| Coupon B.T.K. dvd | -10% FIXED for 6 months -Then 10% for every month the Consumer Price Index (”CPI”) year-over-year value is between 0-7% (3mo lookback) |
| Frequency | Monthly, first payment 2/23/2009 |
| Minimum Purchase | $10,000 |
This looks like a serious no brainer. We have CPI at or below 1% and crashing down. We have Bernanke talking in London about how he will raise rates quicker than you can say “Paulson’s Plan” as soon as a recovery has started to show its early face. The government and Wall Street are clearly worried about deflation (ie massive stimulus) than inflation right now. So you are telling me we are going to go through a deflationary cycle, turn it around, show enough growth to start raising rates, and then have CPI shoot through 7%…all in 36 months? That is the life on the note.
All you are betting on here is Morgan Stanley doesn’t go out of business, which with there recent bank holding company status and merger with Smith Barney, seem like a pretty good bet.
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