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Morgan Stanley would have voted that the Penn Central and Erie Lackawanna organizations were definitely “not hot.” Before Elliott Ness could use the famous code word for his team, Morgan Stanley would have declared these two laggards as untouchables.
Using the same reasoning, Morgan Stanley is not begging any of its clients to buy Amtrak, the US Passenger Rail System. Why not? Because Morgan Stanley knows what’s hot! And they know what is not! It also can recognize that when the buzzards are circling, it is not time to get in the game. Amtrak is not in their sites.
As a global financial services firm headquartered in New York City, the company is very successful operating within 42 countries with more than 1300 offices and 60,000 employees. They report over $287 billion in assets. Just like the national debt, the Morgan Stanley asset clock is always increasing.
Headquartered in the Morgan Stanley Building in Midtown Manhattan, New York City, this company has a lot of chutzpah and it is ready to make a buck anywhere in the world at the drop of a hat.
Their storied history finds J.P. Morgan & Co. partners Henry S. Morgan (grandson of J.P. Morgan), Harold Stanley and others, forming the organization on September 16, 1935, in response to the infamous Glass-Steagall Act. This required the splitting of commercial and investment banking businesses. I would suspect that Morgan Stanley would agree that the repeal of this act helped bring about the financial (banking) crisis of 2008. That is a story for another day.
Morgan Stanley survived the 2008 tragedy. Yes, the company did take a bailout but paid it back post haste. On June 17, 2009, Morgan Stanley announced that it was pleased to pay back the $10 billion in TARP money it had borrowed, to the U.S. Treasury.
Morgan Stanley clearly knows what it is doing and it is respected across the globe for its financial and investment management prowess. It knows who’s got it and who doesn’t! The company has formed some very positive conclusions about rail and the Chinese. Both rail and the Chinese are very hot right now!
None of their analysts are mocking the Chinese for trying to dominate high speed rail, though US politicians would have us believe that any US rail project equates to the “bridge to nowhere.” Along the way to achieving the most difficult piece of the rail puzzle—high speed, the Chinese are also taking a lead in plain old rail technology, including passenger service. Amtrak, an unloved stepchild passenger rail business run by the US government, is hard pressed to continue to survive.
For years, I have been impressed with the rail system in Europe. We in the US would be so lucky to have a European railway type system in place across the mainland. Morgan Stanley is looking beyond Europe and its system, and as they look, they cannot help but find China’s high-speed rail on the economic fast track.
Morgan Stanley thinks this is very good for China. Too bad the United States is flat broke for it would be good if we could find some consulting dollars in the US treasury to hire Morgan Stanley. This group of professionals could not only help US formulate our own rail strategy but they could help us implement it. They would be an ideal facilitator for US success.
Right now the US strategy for passenger rail is very simple: underfund Amtrak; make them seem like goofs and buffoons; get the American people to think rail is unimportant; and keep the tracks and rolling stock in such disrepair that a reasonably prudent person would think that passenger service can never make it in this country. The Chinese prove every day that our leaders can’t even lead from behind. The Chinese know that the lead dog has the best view, and now that they have passed the US in industry prowess, they are not ready to fall back in the pack.
Anybody paying attention knows that the biggest transportation infrastructure project in history is underway in China and it is transforming the Chinese landscape. China’s once rural only population is becoming more mobile. Remote regions of China are now being linked with major cities thus opening up major areas for commerce. Moreover, Chinese businesses are racing to meet under-served consumer demand. Meanwhile US businesses are racing to see if they can get out of Dodge before the government puts them out of business. Along the way, they are also racing to buy real-estate and operating rights in China.
Morgan Stanley sees high-speed rail as a key to China’s balanced, sustainable double-digit growth. China’s relationship with the US can be summed up in the following question: “Who owes what to whom?” Why is it that our leaders cannot see this? With all the evidence to the contrary it is a puzzle as to why the US thinks rail is strategically unimportant.
By 2020, Morgan Stanley reports that four super-city clusters will emerge in China and two existing super- cities will expand as a direct result of the population’s increased mobility and the surge in domestic traffic thanks to rail service. Are the Chinese that much smarter than we the people who came from the melting pot? What happened to America?
Morgan Stanley sees a more mobile workforce, brought about by an expanding passenger railway infrastructure, bringing on newly accessible markets that are able to serve more and more people. A major advantage is that this new rail infrastructure narrows the country’s geographic and economic disparities.
And, we thought these guys were know-nothing communists?
Morgan Stanley says this is not a pipedream. It is coming and its impact is imminent. We’re not looking at 2050. By 2013, 50% of cities on the planned ground floor infrastructure network will be connected to the high-speed rail grid. Regional trains will also connect thus making rail the way to go and the quickest way to go in China. Why would China want to build thousands of airports when rail is the best technology and the Chinese are the current leaders in the technology?
The economic impact of increased connectivity will continue well beyond the immediate gains for industry. Some industries are clearly well placed to derive long-term benefits from China’s infrastructure build-out. Over time, more and more will be able to do more and more because the Chinese have decided that rail is the way to go.
I don’t want to live in China, but regarding rail travel at least and many other aspects of business, there is no uncertainty in China. The intermediate results are in, and the strategy is already paying off huge dividends. And, by the way, the government subsidizes rail. All rail systems in all countries are subsidized.
Morgan Stanley is looking to make a lot of money helping the Chinese government become number one in the world. Meanwhile, the US government is embarrassed that we are still looked upon as being number one. Instead of working towards success, our leaders are still in a quandary trying to figure out how to split the last half-dime from the Benjamin Franklin estate so that Ben’s “rich” family cannot get all the proceeds. Redistribution of finite resource is our government’s hallmark. They want to confiscate every nickel available but are not ready to help the US industry to compete for all the world’s nickels. Consequently, we owe more and more to those countries that once shined our shoes. While others are prospering, our net worth as a country is shrinking. And the fiddle has become the National instrument.
Our government does not know how to treat industry. It takes one of its greatest companies, Boeing, and punishes it for trying to move to get a better deal in a different state. Meanwhile AirBus, the real competitor, is subsidized by multiple European countries collectively hoping that they can put Boeing out of business and take the whole airline pie. Who has the better idea? Europe and Asia are laughing at us since we find no value in rail. The US transportation strategy appears to be to lose on the ground, in the air, on the water, and via the rails.
The new and controversial, politically-charged transportation bill won’t improve the auto, air, water, or rail industries but it will make it tougher to walk in safety in this country. So, there is no hope on the horizon. Is it possible that we need new leadership?
Morgan Stanley analysts from 12 industries and three continents identify the company’s best opportunities. To make sure they are not left out of major world proceeds, Morgan Stanley has created geographic and sector baskets based on their investment analyses. China and the impact of rail on the business potential are well noticed.
They believe that if they understand how things really are, and they can help anybody capitalize on that reality, Morgan Stanley will capture the secular opportunity in China for the coming 10 years. What do our leaders think about US opportunities, and what are they doing to assure we achieve them? We’re arguing about whether women can afford $9.00 a month for contraceptives! How does that help?
Morgan Stanley is not a slouch agency of the US government, like the EPA, which acts as a parasite on all US businesses. Morgan Stanley is a thinking money machine. It is ready to grab it all, especially in helping its clients in hotels, restaurants, tourism, car rental, property, and rolling stock. Why not take it all?
Aviation and toll roads may not fare as well as investments according to Morgan Stanley. They are not as interested in these dead markets. Isn’t it ironic that the US has invested in more and more toll roads and in airports? We should just look at the TSA to see how well we are doing in the eyes of those who can make a difference. Would Morgan Stanley invest in the TSA if it went private? Ask them?
We all know how big China is geographically and it surely has a huge population. So why should it bother any of us sitting in our comfort zones in the US that China is doing so well? So what if the Chinese were to become the leaders in rail in the world? American politicians argue that rail is an outmoded industry and so we should not invest any more in this technology. Their preference is to spend taxpayer dollars for promising new ventures such as solar with companies sure to fail such as Solyndra. Maybe Morgan Stanley’s team can sell Amtrak to the Chinese. The rail assets might not be worth much but the opportunities would be endless.
You can bet Morgan Stanley knows that for the last two years China has been working on a massive Asia-Europe Rail System while the US is still caught up in whether we should insist that the Chevy Volt get more than 35 miles per charge. But, why should Morgan Stanley’s opinion matter to US? Well, maybe because they know what they are doing and right now we are running blind!
As communist as it is, China is not close to being brain dead. Perhaps we should suspend alcohol shipments to Washington DC for about twenty years to see if the decisions get any better. One might easily conclude that American leaders take the brain deadening pill immediately after the oath of office.
China is ambitious. China wants to win. America wants to become a multiple pot nation of disparate communities. Melting and becoming an American is no longer the preferred choice. I want America to win. Our government does not seem to think it matters who wins as long as everybody feels good after the game. Instead of a melting pot, today’s leaders like the notion of a diversity pot.
Yet, in the same breath our American government wants all citizens to be completely equal and all treated the same way. Through the magic of redistribution, the innovators and the wage earners and the ne’re-do-wells all become equal. Government does not want successful people to continue their success while the Chinese encourage their best to excel. The US government enjoys splitting up what is left from an ever diminishing pie while in China, everybody is a baker and everybody is baking more pies every day.
The Chinese rail plans are getting even more ambitious as time passes. Only those who think they can succeed do succeed. Success then breeds success. Redistribution breeds resentment. Those who think they can’t are always right. Those who government makes helpless will remain helpless. The Chinese know they can do well and they can do even more. Unlike the leaderless here in the US, they prove everyday that they can, simply by achieving success.
The Chinese are honored that they are # 1 in high speed rail but they are not satisfied with having the most advanced and extensive rail line in the world. They are making the first moves that would position them in the future to take over all railroads in all countries. Why not go for the gold? The Chinese in recent years have been unstoppable?
They have their blueprints ready to connect their own massive rail system to 17 other countries in Asia and Eastern Europe. Ultimately, the plan is to join the European rail network, a network that right now has no rivals. The European rail system needs to continue to improve to avoid being dominated by the Chinese—who have not even connected yet.
The Chinese are doers. Unlike the US, they don’t encourage arguments about whether they are exceptional or not. They simply do exceptional things. They expect this massive rail project to be completed in 10 years. It will include three major continent-crossing lines running at 200 mph. One line will connect London to Beijing in a two-day trip and continue on to Singapore. Another will link Vietnam, Thailand, Burma and Malaysia. The third will connect Germany to Russia, going across Siberia and back into China.
How’s them apples?
And we in America can’t seem to even gain consensus to build a rail spur from New York City to Northeastern Pennsylvania. We can’t say “yes” to a pipeline to bring much needed oil from Canada. Quite frankly, if we had trees full of “them apples,” our current government officials would prohibit us from harvesting them. Who are we kidding?
Do you still think rail is not a strategic resource? Are the Chinese stupid? How do you think the US will connect to any of these networks or be a real player with our joke of the day Amtrak rail system, and our complete lack of rail technology and know-how?
Let’s all have a big laugh!
Brian Kelly owns his own IT business consulting practice and is a retired Assistant Professor of Business Information Technology at Marywood University; he is married and resides with his wife of thirty-five years in Northeastern Pennsylvania. Kelly believes that limited government spawns both liberty and freedom, and is running for Senate in Pennsylvania where he has been endorsed by the Independence Hall TEA Party.
About Brian Kelly
Brian Kelly is a business owner and former assistant professor at Marywood University; he and his wife, Pat live in Northeastern Pennsylvania. Kelly ran for COngress and for the US Senate in his state and he believes limited government brings liberty and freedom. Brian's 48th book is titled, Saving America, The How-To Book. It is available at www.checkoutking.com and www.itjungle.com.