Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Well clearly you are much more advanced than me, why don't you share some great tips since you are so far ahead of the game...
Well clearly you are much more advanced than me, why don't you share some great tips since you are so far ahead of the game...
didn't even know you posted here
bottom trendline held
machines buying hard.
leadership confrontation overblown.
Like I said, I have been watching and I know. Noticed it 3 weeks ago. Someone is unloading, just sit back and watch...
Like I said, I have been watching and I know. Noticed it 3 weeks ago. Someone is unloading, just sit back and watch...
Nope, on several days it has lead the % gains down compared to it's friends. Trust me, I've been watching. You can't tell just by lookng at a chart... trading much worse to it's direct competitor GS too...
Thanks but MS has been lagging for weeks now, today is one of many...
Thanks but MS has been lagging for weeks now, today is one of many...
MS is likely trading lower based on Jefferies Group (JEF) earnings.
http://www.reuters.com/article/2011/09/20/jefferies-idUSL3E7KJ2JD20110920?feedType=RSS&feedName=bondsNews&rpc=43
Mr Finkin, IMO should be in a cell along with several others. The punishment that is passed down to these guys is a joke.
With all of the corruption that is being exposed lately with all of the big banks there should be a dtc lock put on them all.
Have the DOJ go through there records for the past few years and start locking them up, IMO, of course.
When searching for buys it is best to hit them when their down...
This sector is down, but not out.
However, I shall watch for entry point soon.
I have never had a position here.
Morgan Stanley and Goldman Sachs slashed their forecasts for global economic growth, citing weaker- than-expected growth in the second quarter of this year, along with slower global trade growth and additional austerity measures announced in several countries.
Long term (5-12 months it loooks excellent.
MS-BULLISH TO WATCH NOW
MS is trading in the range of $20.18 - $23.78 in the past 30 days.
MS bounced back from a recent support.
Commodity Channel Index (CCI) is bullish for MS.
Money Flow Index (MFI) is bullish and moving up for MS.
MS formed a bullish Price & Exponential Moving Average Crossover signal.
MS formed a bullish Price & Simple Moving Average Crossover signal.
The 10-day simple moving average is bearish and moving down for MS.
Average volume increase over 5% for MS.
may not be a good time to be *either* ..
May 12, 2010 1:54 AM
WSJ: Morgan Stanley Investigated by Feds
http://www.cbsnews.com/8301-503983_162-20004756-503983.html
--
4kids
all jmo
It’s a Good Time Not To Be Goldman
http://online.wsj.com/article/SB20001424052748703465204575208451223092816.html
›Morgan Stanley Finally Creeping Up on Rival Goldman
APRIL 27, 2010
By DAVID REILLY
It's good not to be Goldman Sachs Group. That should be the new refrain of Morgan Stanley shareholders.
Fraud allegations levied by the Securities and Exchange Commission and the prospect of tougher financial-overhaul legislation have knocked more than $30 off Goldman's share price, or about 17%, in less than two weeks. During that same period, which saw strong earnings reports from both firms, Morgan's stock has gained about 3%.
Things aren't likely to get better for Goldman on Tuesday: Chief Executive Lloyd Blankfein and other executives are due to be raked over the coals at a congressional hearing that will look into the trade at the heart of the SEC's claims.
By dragging down the share price, Goldman's travails have led Morgan's stock to trade close to, or at a premium to, Goldman's, based on some measures such as price to tangible book value.
That is quite the reversal of fortune. Over the past five years, Goldman's stock has risen 50%, while Morgan's has fallen about 40%. And Goldman typically has traded at a valuation comfortably above Morgan's due to its consistent delivery of knockout earnings growth and superior returns on equity.
There is an element of vindication for Morgan shareholders. In the immediate wake of the crisis, Goldman's return to business as usual meant profits sizzled, while Morgan's fizzled. The latter, after its near-death experience, decided to reduce its reliance on trading and beef up more stable areas such as wealth management.
Even now, with Morgan's trading engine firing on more cylinders, the firm still lags behind Goldman. Morgan's first-quarter return on equity of about 13%, excluding some items, compared with a 20% return posted by Goldman.
The hope: That Morgan ends up with a more-balanced business than Goldman if financial-overhaul legislation proves tougher than once expected, especially in regard to trading. Morgan's also-ran status makes life more comfortable from a regulatory and political standpoint as Goldman remains in the spotlight.
To really keep pace, though, Morgan will have to show that its retooled trading operations can go toe to toe with Goldman and that it can deliver on plans to widen margins in its expanded wealth-management business.
That leaves Morgan with significant execution risk as it pursues its new strategy. Goldman, while still running the risks inherent in huge trading operations, is more at the mercy of regulators. Both firms may feel the sting of any changes to the over-the-counter derivatives markets, given that they are among the top five players.
It is still too early to say if the Morgan tortoise can beat the Goldman hare, but with Washington in the front row, the race has at least gotten more interesting.‹
Mack Steps Down as Morgan Stanley’s Chief Executive
By Christine Harper
Sept. 11 (Bloomberg) -- John Mack, who struggled to return Morgan Stanley to profitability after surviving the worst financial crisis since the Great Depression, will turn over his chief executive officer title to Co-President James Gorman.
Mack, 64, will step down at the end of the year and remain chairman of the New York-based bank for at least two years, he said in an interview yesterday. Gorman, 51, will become CEO and Walid Chammah, 55, co-president with Gorman since 2007, will relinquish that role and remain chairman of Morgan Stanley International in London. The changes take effect Jan. 1.
In more than four years leading the firm, Mack sought to improve profits and repair divisions that appeared under former CEO Philip Purcell. Mack’s strategy of boosting trading risks backfired in 2007 when bad bets led to the firm’s first quarterly loss. While the company survived the financial crisis that devastated some rivals, Morgan Stanley has lost money since the third quarter of 2008 and reined in trading even as Goldman Sachs Group Inc. earnings hit an all-time high.
“Mack has been beaten up a little for not taking as much risk in the capital markets as Goldman,” said Matt McCormick, a banking industry analyst at Bahl & Gaynor Inc. in Cincinnati, which manages $2.3 billion. “He was given a tough job, I think he handled it above average and history will judge him a solid leader on Wall Street.”
Morgan Stanley slashed the assets on its balance sheet by almost a third to $677 billion at the end of June from $987 billion at the end of August to cut its reliance on leverage, or borrowed money. The firm’s average value-at-risk, a measure of how much the company estimates it might lose in a day’s trading, was $154 million in the second quarter compared with $245 million at Goldman Sachs.
Missed Opportunities
Led by Chief Executive Officer Lloyd Blankfein, Goldman Sachs set a new Wall Street record for fixed-income and equities trading revenue during the second quarter. Colm Kelleher, Morgan Stanley’s chief financial officer, said in July that the firm’s fixed-income team “didn’t pursue the opportunities we could have” in the second quarter.
Gorman, born in Australia, was recruited by Mack in August 2005, less than two months after Mack became CEO, to run the retail brokerage division. Gorman previously worked at Merrill Lynch & Co., now part of Bank of America Corp., which is Morgan Stanley’s biggest competitor in providing financial advice to individual investors.
Brokerage Business
Earlier this year, Gorman increased Morgan Stanley’s investment in its brokerage business when he formed a joint venture with Citigroup Inc.’s Smith Barney. Morgan Stanley paid $2.75 billion in cash to Citigroup to gain a 51 percent stake in the venture, dubbed Morgan Stanley Smith Barney, which had 18,444 financial advisers as of June 30.
Gorman said in an interview that he doesn’t expect to change Morgan Stanley’s strategy.
“We’re pretty clear about what kind of company we’re going to be,” Gorman said yesterday. “A lot of what has to happen now is to really focus on day-to-day execution.”
Morgan Stanley in July reported its third consecutive quarterly loss, weighed down by accounting charges and costs as well as fixed-income trading and asset-management revenue that Mack said was unsatisfactory.
The company’s stock, at $28.64 in New York Stock Exchange trading yesterday, is down 34 percent from its closing level on June 30, 2005, the day Mack was named chairman and CEO. Goldman Sachs shares are up 71 percent and JPMorgan Chase & Co. shares climbed 22 percent over the same period. Morgan Stanley’s shares slipped to $28.39 as of 11:15 a.m. in Frankfurt trading today.
‘Bigger-than-life’
“Mack is a bigger-than-life individual” who has had both negative and positive effects on the firm, said Brad Hintz, an analyst at Sanford C. Bernstein & Co. and a former treasurer at Morgan Stanley. “Mack’s leadership stabilized the firm after Purcell left and he pulled the firm back from failure in 2008.”
Mack’s decision to step down was unrelated to the firm’s recent performance or the stress of last year’s financial crisis, Mack said. He said he told the board 18 months ago that he would like to hand off the CEO title after he turns 65 in November.
“I’ll stay as chairman at least for two years working with James, working with clients,” Mack said. “I’m not leaving this firm. This firm is part of my DNA.”
Mack, the youngest of six boys born to Lebanese immigrants, entered the securities industry by accident, according to a biography posted on the Horatio Alger Association’s Web site. In his junior year at Duke University, a cracked neck vertebra ended the football scholarship that had paid his way, forcing him to take a clerking job at a North Carolina brokerage.
Bond Salesman
He graduated from Duke in 1968 and joined Morgan Stanley as a bond salesman four years later. He spent most of his career at the firm, working his way up in fixed-income sales and trading before becoming president under CEO Richard Fisher in 1993. He encouraged Fisher to sell the firm to Dean Witter Discover & Co., the brokerage firm led by Purcell, only to leave in 2001 after Purcell refused to relinquish power.
He helped run Zurich-based Credit Suisse Group AG for three years, leaving after a clash with the board. When Morgan Stanley shareholders and employees helped to oust Purcell in 2005, fed up with a lackluster share price and an autocratic management style, they turned to Mack to restore the firm’s former glory in investment banking and trading.
Like Purcell, Gorman worked at consulting firm McKinsey & Co. before running a retail-oriented financial brokerage and has never worked as a trader or banker. That’s led some analysts to question whether he’ll have the same difficulty winning over the institutional-securities side of the business as Purcell did.
‘Lost Decade’
“I am concerned that the Morgan Stanley board of directors is placing an admittedly capable executive with a largely retail brokerage operating background in charge of a global capital markets firm with the second-largest investment banking franchise in the world,” Bernstein’s Hintz said. “It was a similar decision in 1997 that led to the lost decade of Morgan Stanley.”
Mack dismissed the concerns, saying that Gorman is much more accessible to bankers and willing to make client calls than Purcell was. Gorman said that a majority of his recent client meetings have been with customers of the institutional- securities side of the business.
Mack said he considers his own greatest accomplishment to be leading the firm through last year’s crisis, which wiped out Bear Stearns Cos., Lehman Brothers Holdings Inc. and Merrill Lynch. One week after Lehman’s Sept. 15 bankruptcy, Morgan Stanley and Goldman Sachs converted to bank holding companies, ending their history as independent securities firms to win the backing of the Federal Reserve.
Japan Investment
Morgan Stanley shares fell as low as $9.68 on Oct. 10 before the firm won a $9 billion investment from Japan’s Mitsubishi UFJ Financial Group Inc. and $10 billion from the U.S. government on Oct. 13. Mack has since repaid the Treasury and the stock has rebounded. Spreads on the company’s bonds, which widened during the financial crisis, have since narrowed to bring them in line with peers.
“You’ve got to give him some credit for surviving,” said Kenneth Crawford, a senior money manager at Argent Capital Management LLC in St. Louis, which oversees $700 million. “The good thing is there’s an MS ticker on my screen that changes price each day, and there are a fair number of his peers that aren’t on my screen anymore.”
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.
Last Updated: September 11, 2009 05:21 EDT
MORGAN STANLEY(NYSE: MS)
After Hours: 29.53 0.16 (0.54%) 7:57PM EThelp
Last Trade: 29.69
Trade Time: Aug 21
Change: 0.33 (1.12%)
Prev Close: 29.36
Open: 29.86
Bid: N/A
Ask: N/A
1y Target Est: 32.50
Day's Range: 29.00 - 29.95
52wk Range: 6.71 - 44.50
Volume: 24,293,853
Avg Vol (3m): 24,151,000
Market Cap: 40.35B
P/E (ttm): 20.49
EPS (ttm): 1.45
Div & Yield: 0.20 (0.70%)
Another Great! read...Thanks! for sharing that DD ;^))
More on the same subject:
#msg-37134560
Small Cap Investor and everybody:
Forget possible dilution, balance sheet,and all other distraction. MS is and will move higher regardless of all the nay sayers. Financial stocks are heavily shorted and underowned
pure and simple and funds are looking for entry point. Some
people are trying to mudy the water and make you sell, don't fall for it!! One look at the charts says it all. We have just
closed above the 200 day MA. FOR THE FIRST TIME in a while.
Right now the probability is 80-20 in your favor, take from an
old pro trader with lots of gray hair, MS is going higher pure
and simple. Enjoy the ride!!!!
MS is planning on selling shares as well >>>
Goldman Sachs mulls stock sale to repay TARP money: report
Friday April 10, 2009, 6:44 am EDT
Buzz up! Print (Reuters) - Goldman Sachs Group Inc is considering making a multibillion dollar share offering to investors as part of its efforts to repay a $10 billion government loan, the Wall Street Journal reported citing people familiar with the matter.
Reuters - Traders work in the Goldman Sachs booth on the floor of the New York Stock Exchange, September 30, ...
The announcement could be made as early as next week and though Goldman executives haven't determined the exact size of the offering, it is expected to be at least several billion dollars, the people told the Journal.
A final decision hasn't been taken and will be based partly on market conditions, the Journal reported.
Goldman Sachs, which is due to report its quarterly earnings on Tuesday, is one of several recipients of the U.S. government's Troubled Asset Relief Program investment and plans to repay the money as soon as possible.
Goldman Sachs could not be reached immediately for comments.
(Reporting by Sweta Singh in Bangalore; Editing by Vinu Pilakkott)
Thank you for this observation, zigzagman, so it seems that whatever report I would make about the company, it wouldn't be accurate. That's not good, well at least I know what is the reason for that. So it's better to wait till the new results are announced and then try to discover what is going on in the company. Maybe you know another example about which I would be able to write something better than about MS?
You won't be able to properly analyze...
The balance sheet of any of the big banks using that latest balance sheet information that DD just gave you in that link...
That's because the FASB is going to announce changes to the Mark-to-Market accounting system after their board meeting on April 2nd that will be retroactive...
That means that much of the losses they are showing on their books now won't be there anymore, and all the banks balance sheets will improve dramatically...
So if they were having a negative 1st Quarter before, they won't be showing it anymore because of the changes in the M2M accounting rules...JMO
You won't be able to properly analyze...
The balance sheet of any of the big banks using that latest balance sheet information that DD just gave you in that link...
That's because the FASB is going to announce changes to the Mark-to-Market a
Thanks for the link.
Can you tell me whether the company is able to pay all the debts? Has this situation improved during the total year, or everything has been going worse? How do you count it? How to find that out?
I'd like to find this information in order to compare the results of the whole year.
This is the latest balance sheet:
http://sec.gov/Archives/edgar/data/895421/000119312509013429/d10k.htm#toc90217_32
What are your specific questions?
Hey, I am totally disappointed with lookin for help from people. Maybe that's a better place than other forums.
I'm lookin for people to talk about balance sheet of company.
I've some problems at this moment with the numbers of BS. Can anyone help me analyze company's performance? I need to make a report for my boss about Morgan Stanley but I don't have a clue where to get this analysis from, so I thought maybe u guys could help me and show some things about the balance of MS?
U would help me so much.
Dissapointed smallcapinvestor
I was just about to post that...
You beat me to it...lol
Here's a Reuter's article on the same subject:
http://www.reuters.com/article/marketsNews/idINN2052130520090320?rpc=44
AP
Morgan Stanley CEO's compensation plummets in 2008
Saturday March 21, 6:13 pm ET
Morgan Stanley Chief Executive John Mack sees compensation plummet in 2008
NEW YORK (AP) -- Morgan Stanley Chief Executive John Mack received no raise, bonus or stock options last year, and the bank leader's total compensation, valued at $1.2 million, sank by more than $40 million compared with 2007, according to a Securities and Exchange Commission filing.
Mack, 64, earned an $800,000 base salary and $435,097 in other compensation, which largely involved personal use of company aircraft. But the CEO told Morgan Stanley's board that, as of March 10, he will reimburse the company for that.
New York-based Morgan Stanley's board requires Mack, who also serves as bank chairman, to use the company plane "when traveling by air whenever feasible."
Mack received no bonus in 2007 and asked that he get none last year too, the company's proxy statement said. He has served as chairman and chief executive officer since 2005, and his employment agreement requires that his base salary stay above the $775,000 salary of his predecessor.
The Associated Press compensation formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, any bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
In 2007, Mack was paid a total of $41.7 million, a total that made him No. 8 on the AP list of CEOs. But Mack's pay was largely tied to his performance in 2006, when he led the bank to a profit of more than $7 billion. The bank's profit plunged 57 percent the next year, as it absorbed heavy losses in the subprime lending crisis.
Most of Mack's 2007 compensation came from $40.2 million in stock awards.
The bank said in its latest proxy, which was filed Friday, that all outstanding stock options had no intrinsic value as of Nov. 30. This means they were underwater, meaning no holder would exercise them because they would lose money if they turned around and sold the shares acquired.
The exercise price of each option was greater than $14.75, the closing price of Morgan Stanley's stock on Nov. 28, the last trading day of its fiscal year.
2008 ended roughly with Morgan Stanley reporting a $2.37 billion loss during its fiscal fourth quarter, due to a range of losses on assets. The bank, which received $10 billion under the government's Troubled Asset Relief Program, earned $1.59 billion, or $1.45 per share, during fiscal 2008.
Morgan Stanley's stock shed 70 percent of its value in 2008, as it fell from $53.11 to $16.04. The Standard and Poor's 500 index, by contrast, fell 38 percent in 2008.
That was an Excellent article DD...
Thanks! for sharing...
zz
I guess we'll have to see.
This Barron’s feature on MS and GS focuses on the differences between
the two firms in valuation and business model. At current prices, MS
strikes me as the better deal.
http://online.barrons.com/article/SB123698562029125353.html
›Goldman Sachs and Morgan Stanley are Wall Street's sole
standouts. Both could thrive as markets pick up.
March 16, 2009
By ANDREW BARY
Yes, Virginia, there still is life on Wall Street.
After a year that saw the bankruptcy of Lehman Brothers and forced mergers involving Bear Stearns and Merrill Lynch, Goldman Sachs and Morgan Stanley seem on course for a profitable first quarter and full year, despite a terrible economy and depressed global stock markets. The investment community is warming to the financial giants after bashing their shares last year. Morgan Stanley (ticker: MS) is up 58%, to 25, in 2009, making it the top-performing big financial, while Goldman (GS) has risen 17%, to $98. In contrast, shares of Bank of America (BAC) and Wells Fargo (WFC) have tumbled more than 50%.
Goldman and Morgan Stanley aren't burdened by the hefty consumer-debt and commercial-loan portfolios that are hurting their banking rivals. And both have bolstered their relationships with institutional traders in the important bond, equity, commodity and foreign-exchange markets, as formerly formidable rivals have perished, stumbled or become preoccupied with boosting their capital to remain going concerns.
Despite the gloom enveloping much of the credit market, debt underwriting has surged this year. Financially healthy companies have rushed to take advantage of historically low rates and to finance takeovers. [E.g. Roche-DNA, PFE-WYE, and MRK-SGP.] And more companies are employing Goldman and Morgan Stanley, whose standing has risen among investors, in part because both value virtually all their assets at market prices, leaving them less vulnerable to write-downs than banks, which carry most of their assets at face value.
"Capital-market activity is a bright spot...while consumer credit appears to be deteriorating by the day," wrote Goldman Sachs equity analyst Richard Ramsden in a client note last week, in which he put Morgan Stanley on the firm's Conviction Buy List.
"The competitive landscape has changed," Goldman's chief financial officer, David Viniar, said last month. "Some of our competitors are no longer there. Others are very inward-focused because they are having their own problems. So there are just opportunities every day in the franchise doing stuff for our clients -- taking risk, distributing risk." Goldman and Morgan Stanley executives declined to comment for this article.
Look at what has happened on Wall Street. Lehman is gone. Bear Stearns is part of JPMorgan (JPM). Merrill Lynch merged into Bank of America, which bought Merrill for its retail brokerage network, not its institutional business. Citigroup (C) is wounded. Most European banks are on the ropes, including UBS (UBS), which has been scorched by enormous U.S. mortgage losses. A year ago, about a dozen financial heavyweights were scrapping for U.S. debt, equity and advisory business. Now there may be just three committed and deep-pocketed rivals: Goldman, Morgan Stanley and JPMorgan.
Don't be misled, however: While they are doing better than their competitors, not everything is rosy for Goldman and Morgan Stanley.
"Basically every company...every industrial company in every industry in every country in the world is doing badly," Viniar said last month. Institutional and retail-client activity is down, formerly profitable areas like merger-advisory work and initial public offerings are off sharply or moribund. Once-lucrative asset-management arms are getting stung by market declines. The value of real-estate, mortgage and private-equity holdings continues to deteriorate.
There also is continued talk of a potential brain drain, as key people quit to join investment-banking boutiques or hedge funds now that big firms are trimming compensation, partly in response to criticism from Washington over pre-2008 Wall Street's noxious combination of enormous bonuses and excessive risk. However, it is hard to have sympathy for big financial firms, particularly Goldman. The average compensation for its 30,000 employees last year was still $360,000, although that is down from about $660,000 in 2007, when CEO Lloyd Blankfein took home $70 million.
The firms dislike acknowledging the benefits they derive from various government liquidity programs, including $10 billion each from the Troubled Asset Relief Program (TARP) and a less-publicized bond-guarantee program from the Federal Deposit Insurance Corp. that has produced more than $20 billion of cheap financing for both Morgan Stanley and Goldman since it began in October. The two are among a handful of large financial outfits that Washington probably has deemed too big to fail. At the same time, both firms are hunkering down, reducing risk and maintaining liquidity, with the aim of surviving a tough first half. That would position them to take advantage of an economic and market recovery in late 2009 or 2010.
All this reassures jittery investors. Amid a broad rally in financial stocks last week, Morgan Stanley jumped 48% and Goldman, 30%. There could be additional upside this year, with Morgan Stanley topping $30 and Goldman hitting $110 or more. And the stocks could go a lot higher if business conditions and earnings rebound (although the deeply depressed shares of banks and life insurers could rally even more in any recovery).
Morgan Stanley now trades at 10 times projected 2009 earnings of $2.48 a share, and Goldman fetches 12 times estimated 2009 net of about $8. But getting a precise fix on results is tough in this market.
Many investors now value financial companies based on shareholder equity, or book value. Morgan Stanley trades for 83% of its $30 book value and 92% of its tangible book value of $27. (Tangible book excludes acquisition-related goodwill and other intangible assets.) Goldman trades for 100% of book value of $98 and 1.1 times tangible book of $88.
Both stocks are up sharply from their lows but way below their highs. Morgan Stanley bottomed at $6 this past October before a $9 billion investment from Japan's Mitsubishi UFJ Financial eased concerns about its capital adequacy, while Goldman bottomed at $47 in November. Morgan's 52-week high was near 52, while Goldman's was 203.
Roger Freeman, a Barclays analyst, has targets of $30 on Morgan Stanley and $100 on Goldman. Freeman, who sees the firms taking bigger write-downs than most of Wall Street does, expects Morgan to earn 25 cents a share in the current quarter, rather than the consensus forecast of 36 cents. Similarly, he predicts that Goldman will earn 80 cents, not the consensus figure of $1.35.
Both firms switched to calendar-year reporting after they became commercial banks last year; previously, their fiscal years ended in November. As a result, next month they will report profits for both the March quarter and for just December 2008. Wall Street suspects they may paint the December numbers in as red a hue as possible, to set the stage for a stronger 2009 that would let the firms pay employees better.
How much can each firm be expected to earn when the markets return to a more normal state? The days of 20%-plus return on equity probably are over, as regulators and the markets force lower levels of financial leverage and risk. Morgan Stanley wants to generate a 12%-to-15% return on equity over the current cycle. This year's return could be 10% or lower. Investors probably would be happy to see 10%, which would translate into $3 a share in profit. Goldman had a 32% ROE in 2007, when it earned a record $24.73 a share, but the figure fell to 5% in 2008, as profit slid to $4.47.
Goldman lately has commanded a higher valuation, relative to book value, than Morgan Stanley because it is one of the Street's few firms that largely avoided the mortgage and real-estate disasters that buried Bear Stearns, Lehman and Merrill Lynch. Goldman's brass, led by CEO Blankfein, is considered sharper than Morgan's. Its trading and investment-banking franchises also are considered stronger. Some call Goldman "Wall Street's A Team".
Goldman's investment-management arm, once a poor cousin to Morgan Stanley Asset Management, now is much larger and more profitable than its rival, which has been battered by neglect and weak performance. Reviving the asset-management business is an important priority of Morgan Stanley CEO John Mack.
As they scramble to revive, the longtime rivals are employing dramatically different strategies.
Morgan wants to slash risk by virtually abandoning proprietary trading (in which the firm's own money is used) and reducing "principal transactions" -- investments in real estate and private equity. Instead, it will focus on trading for clients and bolstering fee-based businesses; it took a step toward that recently, when it agreed to merge its retail brokerage unit with Smith Barney, Citi's larger retail network. The goal is to get at least 50% of revenue from non-institutional businesses.
The firm hopes a lower risk profile and more stable earnings will garner a higher valuation. One investor familiar with Morgan Stanley's top managers says that CEO Mack, having been burned by the firm's mortgage and trading troubles in 2007 and 2008, is shifting gears.
"He's reformed. It's almost an AA [Alcoholics Anonymous] kind of thing. He wants to have the best balance sheet in financial services and to reduce proprietary trading. He wants more predictable earnings and doesn't want to run a de facto hedge fund," this investor says. Call it the revenge of ex-CEO Phil Purcell, who advocated that approach, to the dismay of Morgan Stanley veterans, when he ran the firm from 1997 to 2005.
Goldman Sachs, in contrast, believes it has the talent to prudently do proprietary trading and make real-estate, private-equity and other investments.
Investors are pleased that both Goldman and Morgan significantly shrank their balance sheets in late 2008, while boosting capital. Goldman's assets fell to $885 billion from more than $1 trillion in its fourth quarter while Morgan Stanley's slid to $658 billion from $987 billion.
Key capital ratios, including tangible common equity and Tier 1, look good, relative to those of major banks, especially because Goldman and Morgan Stanley value almost all their assets at market prices each quarter, reducing the possibility of nasty surprises. Goldman's tangible common equity ratio was 4.8% on Nov. 30, and Morgan Stanley's was 4.4%, above those of the major commercial banks, which average around 3%.
Morgan Stanley, for instance, has taken some big write-downs already, valuing senior commercial mortgage-backed bonds at less than 50 cents on the dollar and alt-A home mortgages, which are a notch above subprime, at below 40 cents on the dollar.
Both companies are benefiting from government initiatives to pump liquidity into the markets, including a program that lets many financial companies sell debt with maturities as long as three years and backed by the FDIC. Morgan Stanley has issued $23 billion of such debt; Goldman, $25 billion. Although banks pay a fee of as much as 1% for it, the FDIC guarantees amounts to a subsidy. Without it, the companies likely would have to offer interest rates two to three percentage points higher to attract buyers. So, the two may be getting a subsidy of $500 million or $750 million a year.
The aim of the program, which began in October, is to trim bank-funding costs and encourage consumer and business lending. Goldman and Morgan Stanley, however, make few loans, save for the kind that many in Washington detest -- those for job-killing mergers like the pending Pfizer/Wyeth combination.
As part of their comeback plans, both firms are reining in costs, sometimes rather comically. Morgan Stanley, which is seeking $2 billion in cost cuts this year, now charges employees at its Manhattan headquarters a monthly fee of $40 to use an on-site, state-of-the-art gym that had been free.
Employees now must fly coach on domestic airline flights, although John Mack still flies on a corporate jet -- for security reasons, the firm says. Mack will be making one concession this year: He'll have to pay for personal trips on the corporate jet. Morgan has cancelled 75% of its conferences for the year and says the others will be "100% content" -- no golf or tennis outings and no big-name entertainment.
Goldman wants employees visiting New York to stay at the Embassy Suites it owns next to the new headquarters it is building in lower Manhattan. Bye-bye, Ritz-Carlton.
Surrendering free tee times and plush sheets won't do much for Wall Street's ugly image on Main Street. But it shows that Morgan Stanley and Goldman are at least making attempts to adapt to the new financial realities. Combined with the decline of their competitors, that makes them good bets for investors now.‹
Analyst cuts Goldman Sachs rating:
KBW analyst cuts Goldman Sachs rating, price target, lowers profit estimates:
Tuesday March 17, 2009, 9:54 am EDT
NEW YORK (AP) -- Goldman Sachs Group Inc. shares are likely to give back some of their recent price gains, Keefe, Bruyette & Woods analyst Lauren Smith said Tuesday as she cut her rating on investment firm to "Market Perform" from "Outperform."
Smith noted that the stock rose more than 30 percent last week, benefiting from a massive, broad market rally. However, it's likely that the shares will retract from current levels along with the market, she said.
"There is more than a 50 percent chance, in our view, that the market takes a big step back before moving higher after last week's rally," Smith wrote in a note to clients. "We believe that both Goldman Sachs and Morgan Stanley will remain volatile and will continue to provide a lot of trading opportunities but we think they are more likely to give back some of these recent gains along with the market."
Smith also trimmed her price target on the Goldman shares by $7 to $101. Her 2009 profit estimate went from $8.95 per share to $6.60 per share. Analysts polled by Thomson Reuters, on average, expect earnings of $8.16 per share.
However, Smith raised her target price on Morgan Stanley by $4 to $28, and increased her full-year profit estimate to $2.25 per share from $2.10 per share.
Goldman Sachs shares slipped 9 cents to $93.81 in morning trading. Morgan Stanley shares fell 60 cents, or 2.6 percent, to $22.44
http://finance.yahoo.com/news/Analyst-cuts-Goldman-Sachs-apf-14662734.html
As a clarification of my earlier comment, the rescinding was of job offers to folks with those visas according to the article.
In hard times, we have to do what is necessary...
I too feel for the folks that are getting the boot, especially these days when companies are laying off instead of hiring...
It was interesting reading the news release on this site regarding the necessary rescinding of jobs from banking institutions from individuals with H-1B visas. I know our country has a reputation as the melting pot. However, I do understand that some limits sometimes have to be set. I just hope those being rejected do not have hard feelings.
I haven't followed up on that news release...
I'll see what I can come up with later tonight hopefully...
This sounds like a typical job for Morgan Stanley. I hope they are able to help the Asian banks.
RBS prepares sale of Asian assets
By Sundeep Tucker in Hong Kong
Published: February 20 2009 12:08 | Last updated: February 20 2009 16:51
Royal Bank of Scotland has hired financial advisers to assist in the sale of its Asian assets, the clearest sign to date that the stricken UK bank is planning to cull some of its international operations.
People familiar with the situation said the UK bank has chosen Morgan Stanley to advise it following a “beauty parade” of investment banks this week.
http://www.ft.com/cms/s/7534f8ac-ff45-11dd-b3f8-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F7534f8ac-ff45-11dd-b3f8-000077b07658.html%3Fnclick_check%3D1&_i_referer=http%3A%2F%2Fwww.bloomberg.com%2F%3Fb%3D0&nclick_check=1
Citi, M. Stanley may pay $3 billion to keep brokers:
Friday February 13, 10:11 pm ET
NEW YORK (Reuters) - Morgan Stanley (NYSE:MS - News) and Citigroup Inc (NYSE:C - News) are preparing to pay $3 billion of retention awards to brokers to keep them from fleeing a brokerage joint venture, the Wall Street Journal said on Friday, citing people familiar with the matter.
Terms are not expected until later this month, but the issue could grow politically sensitive because the government has injected money into both companies, the newspaper said.
Morgan Stanley is paying Citigroup $2.7 billion to take control of the joint venture, which will combine its brokerage operation with Citigroup's Smith Barney unit.
Citigroup has taken $45 billion from the Troubled Asset Relief Program, while Morgan Stanley has taken $10 billion.
A spokesman for the joint venture did not immediately return a call seeking comment.
Broker retention payments have long been common on Wall Street, and brokerages themselves may become more important to banks because the credit crisis has curbed merger, underwriting and trading activity.
But many investors, politicians and regulators have questioned the propriety of the financial industry paying out big bonuses at all as losses mushroom from bad debts.
According to the newspaper, not all of the joint venture's 20,000 brokers would get retention payments. It said a broker who brought in $1 million in revenue last year might expect to get $500,000 to $1 million, depending on how much he continues to produce.
(Reporting by Jonathan Stempel; Editing by Gary Hill)
http://biz.yahoo.com/rb/090213/business_us_citigroup_morganstanley_brokerage.html?.v=2
Followers
|
24
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
269
|
Created
|
09/24/06
|
Type
|
Free
|
Moderators |
Morgan Stanley
1585 Broadway
New York, NY 10036
Phone: 212-761-4000
Fax: 212-761-0086
Web Site: http://www.morganstanley.com
Index Membership: S&P 100
S&P 500
S&P 1500 Super Comp
Sector: Financial
Industry: Investment Brokerage - National
Full Time Employees: 53,218
BUSINESS SUMMARY
Morgan Stanley, a financial services company, through its subsidiaries and affiliates, provides various products and services to clients and customers, including corporations, governments, financial institutions, and individuals. The company operates in four segments: Institutional Securities, Retail Brokerage, Asset Management, and Discover. Its Institutional Securities business includes capital raising, financial advisory services, including advice on mergers and acquisitions, restructurings, real estate, and project finance; corporate lending; sales, trading, financing and market-making activities in equity securities and related products, and fixed income securities and related products, including foreign exchange and commodities; benchmark indices and risk management analytics; research; and investments. The company’s Retail Brokerage business provides brokerage and investment advisory services covering various investment alternatives; financial and wealth planning services; annuity and insurance products; credit and other lending products; banking and cash management, and credit solutions; retirement services; and trust and fiduciary services. Its Asset Management business offers global asset management products and services in equities, fixed income, and alternative investment products through the company’s representatives; third-party broker-dealers, banks, financial planners, and other intermediaries; and the company’s institutional sales channel. The company’s Discover business offers credit cards and other consumer products and services; operates a merchant and cash access network for credit cards; and an automated teller machine/debit and electronic funds transfer network. The company was founded in 1935 and is headquartered in New York City.
Daily View
Weekly View
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |