No Goldman Reaction for Morgan Stanley (GS, MS)

Banking, finance, and taxes

Published: December 17, 2008 9:05 am

Last Updated: April 28, 2020 2:47 am

Burning_money_pic Yesterday was a rather odd day in more than one way. The reaction to Goldman Sachs Group (NYSE: GS) was given a warm reception, despite the much wider losses than expected, the negative revenues after items, and the mark-downs. This morning, Morgan Stanley (NYSE: MS) came out with much of the same sort of news with wider losses, etc… Yet there is no mercy, no applause, and not even a Swiss-themed neutrality nor indifference.

Morgan Stanley is getting the cold shoulder from Wall Street thismorning. The broker-turned-banker posted a loss of $2.37 billion forthe quarter. The loss is -$2.34 EPS rather than the expected FirstCall loss estimate of -$0.34. Yep, a $2-handle loss rather than aslight $0-handle loss.

The broker took writedowns and losses. Fixed income lost $1.2 billion,yet this is much lower than last year because it now has lower mortgageexposure. It took another $1.1 billion in charges from trading andother sales losses and $1.8 billion in real estate fund losses.

Amazingly enough, the firm was able to post a profit for the full yearjust like its cousin Goldman Sachs did yesterday. Morgan Stanleyshares are down 4% at $15.45 in pre-market trading.

Jon C. Ogg
December 17, 2008

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