Wednesday, March 12, 2008

"Gilligan and the Skipper Too" Spotted On Morgan Stanley's Island

Morgan Stanley's Real Estate subprime debacle is spreading into the "Preferred Class of Stock". Here we have the FIRST Investment Bank (IB) admitting cash/liquidity problems in making good on dividend payments on their Preferreds. First, POTC predicts dividend payments being slashed/cut and perhaps suspended in all contaminated Preferred funds/ETFs. And that action will generate a reaction of massive capital erosion in the underlying Preferred share price of the fund/ETF, as investors who bought for the "safe" dividend decide to liquidate/sell, in effect Abandoning Ship for shore!

"Just sit right back and we'll tell a tale a tale of a faithful ship". You know the rest. With your boat docked and your buttered popcorn in hand, enjoy this series until the Psychology of this Call unfolds. CNBC will have a lot to squawk about come tomorrow, rest assured. We just hope either Gilligan or the Skipper agree to at least an interview, but don't hold your breath ..

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