Bloomberg News

Morgan Stanley Cross-Asset Strategist Peters to Depart

January 29, 2013

Gregory Peters, Morgan Stanley (MS:US)’s chief cross-asset strategist who warned in 2007 that mortgage losses risked causing a financial crisis, is leaving the bank.

His responsibilities will be taken on by the firm’s committee of global strategists and economists, according to an internal memo obtained by Bloomberg News. Lauren Bellmare, a spokeswoman for the New York-based bank, confirmed the contents of the memo. Peters probably will seek a job on the buy side, he said in an interview.

He previously was the head of fixed-income research and led U.S. credit strategy. Before joining Morgan Stanley in 2000, he worked as a strategist at Salomon Smith Barney and as a bank regulator at the U.S. Office of Thrift Supervision.

Peters gave views on asset classes from equities to commodities and currencies. He said in a note last month that his group expected lower returns in 2013, and favored emerging- market and European equities. The group was bearish on U.S. Treasuries and the Japanese yen.

“We appreciate Greg’s hard work and determination in helping shape the global macro research product over the past 12 years,” Juan-Luis Perez, who leads research at the bank, wrote in the memo. “His thought leadership and market insights will be missed.”

The bank is eliminating 1,700 jobs this month as Chief Executive Officer James Gorman, 54, pursues $1.6 billion of annual savings during the next two years. Morgan Stanley also is deferring all bonuses for employees who have both total pay of more than $350,000 and incentive compensation of at least $50,000, a person briefed on the matter said earlier this month.

‘Grinding Halt’

Peters warned in November 2007 that there was a greater than 50 percent chance that mortgage losses would cause a systemic shock that would bring the financial system to a “grinding halt.” He said in July that investors should buy corporate bonds, which returned 5.2 percent over the last six months of 2012, according to Bank of America Corp. indexes.

Other calls didn’t pan out. In June 2011, Peters said that inflation would rise over the next year. After climbing in August and September of that year, the U.S. inflation rate, as measured by changes in the consumer price index, fell for the next nine months.

Separately, Peter Bacon, Morgan Stanley’s head of capital markets in Europe, and Gene Martin, co-head of the leveraged and acquisition finance group, also are leaving the bank, according to people briefed on the matter.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net


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