{"id":182027,"date":"2010-01-14T13:39:00","date_gmt":"2010-01-14T18:39:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/obamas-tiny-tax-is-equal-to-a-15-bps-fed-hike-and-morgan-stanley-will-get-creamed-th-hardest-2010-1"},"modified":"2010-01-14T13:39:00","modified_gmt":"2010-01-14T18:39:00","slug":"obamas-tiny-tax-is-equal-to-a-15-bps-fed-hike-and-morgan-stanley-will-get-creamed-the-hardest","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/182027","title":{"rendered":"Obama’s Tiny “Tax” Is Equal To A 15 BPS Fed Hike, And Morgan Stanley Will Get Creamed The Hardest"},"content":{"rendered":"

Are you a bank stock investor worried about Obama’s new too-big-to-fail tax<\/a>?<\/p>\n

For the most part you shouldn’t be.<\/p>\n

Oppenheimer’s Chris Kotowski has run the numbers and concluded that the tax represents the equivalent of a measly 15 basis point hike in the fed funds rate — so on balance, the government is still giving banks a massive cheap-money gift.<\/p>\n

If you’re worried about something, worry more about Bernanke being forced to raise rates to stem inflation (though again, we wouldn’t worry too much about this, because there’s little evidence that such a hike is imminent).<\/p>\n

Now here’s how things would look if the assessment were to go straight to the bottom line:<\/p>\n

\"tax\"<\/p>\n

See that? Morgan Stanley (MS) is going to get creamed nearly twice as bad as Goldman Sachs.<\/p>\n

That being said, Kotowski says not to worry:<\/p>\n

However, we don’t believe that the fee will run directly to the bottom line. We view it as ef fectively an increase in the wholesale cost of funds that will be  passed through to the customers that utilize these institutions’ balance sheets. <\/em><\/p>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n