Sunday, April 17, 2011

Morgan loses Japan building


A Morgan Stanley property fund failed to make $3.3 bil in debt payments by Fri., handing over keys to a 32-story Tokyo office building to Blackstone (BX) and other investors, Reuters said. The building houses Microsoft's (MSFT) Japan offices and others. The repayment failure is the largest of its kind in Japan. It's the latest fallout from highly leveraged investments by Morgan Stanley, a very aggressive property investor before the 2008 financial crisis. Morgan Stanley declined comment. Its shares rose 0.7%. Morgan Stanley and Blackstone report Q1 results on Thu.

One thing I have come to be certain about in recent years is that these guys, the Morgan Stanleys of the world, always have the inside scoop on what is really going on. So why are the bailing out of Tokyo taking a 3.3 billion dollar loss in the process?
Because the potential losses in the near future if they stay in Tokyo are FAR greater. This is possibly the end of Japan as we know it.

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