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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
Thanks it has been good to me so far, lol.
Good for you! ~ I'm happy to hear that ~~~
Wow I did good today on MS.
I am glad to hear Morgan Stanley is in good financial health. However, it is sad to hear that 1500 to 1800 people could be out of work. I understand profit is important, but humans are too. The thought of 8,500 to 8,800 people (a grand total including the earlier 7,000 receiving the axe) possibly doing without is sad. I hope many of them are going to find new positions soon.
Looking GOOD! ~ MS is Up $1.90 +9.25% ~~~
It's making up some of it's huge loss from yesterday ;^)
I bought in this morning and I am up so far.
That sounds like a good idea ~
Good news may be coming soon, and they both got beat up pretty bad yesterday...
I am going to buy some MS and GS tomorrow. I am hoping to get in before they bounce back up.
Thanks for your help. I understand now.
Hi '1994hoosier' ~
Which statement don't you understand in that post?...There are a few of them...
First, I stated MS is one of the strongest companies of the financial banking sector...Many other companies in the same sector like Bank of America and CitiGroup are in much worse shape than Morgan Stanley right now...MS is one of these types of companies who's survival is guaranteed...
I don't know if you know anything about ETF's, but that's what I was talking about when I mentioned FAZ and FAS...They are both Exchange Traded Funds (ETF's) for the Financial Sector...
That means that if most of the stocks of the Financial Sector go up any given day, FAS will go up, and FAZ will go down...
FAS is playing the Financial Sector when you think it will go up, and FAZ is playing the Financial Sector when you think it will go down...
Could someone (preferably zigzagman) clarify what this comment means in simple English? To a newbie like me, it is terribly confusing.
While MS is one of the strongest of the bunch ~
I still like to play the 3X leveraged ETF for the Financial Sector known as FAS...IF Tim G. announces a good plan to save our banking industry, FAS could really take off to the upside FAST...Take a look at it...It's a beauty...
That would be good. My savings have been hungering for better interest.
IF Tim Geithner announces the "bad bank" ~
Plan on Monday like he's supposed to, the Financial Sector should take off to the upside in a big way IMO...
It is sad to see such a disappointing fourth quarter 2008 for profits. I sincerely hope things improve soon.
I'm glad to see Friday's price remained respectable.
MS is coming around nicely these days ;^))
It is good to see a stock price increase today. Given the tremendous decline over the past year, any improvement is an encouragement.
Morgan Stanley Financials:
http://finance.yahoo.com/q/is?s=ms
Morgan Stanley planning to cut jobs:
Monday February 2, 5:37 pm ET
Report: Morgan Stanley planning to cut up to 4 percent of its work force:
NEW YORK (AP) -- Morgan Stanley could announce this month that it plans to cut up to 4 percent of its work force, The Wall Street Journal reported.
The report, citing anonymous people familiar with the plans, said the Wall Street firm could cut 1,500 to 1,800 jobs. The reductions could be announced this month, according to the report posted on the newspaper's Web site.
Morgan Stanley representatives were not immediately available to comment on the report.
The additional cuts come on top of about 7,000 job cuts Morgan Stanley made in 2008, and amid layoffs across nearly every sector of the economy as the nation remains stuck in a recession.
The Journal noted that none of the cuts would come in the global wealth management business, which is getting ready to combine with Citigroup Inc.'s Smith Barney brokerage unit. In a deal announced last month, Morgan Stanley will own a 51 percent stake in the venture.
Morgan Stanley has about 8,400 brokers.
Citigroup has been especially hit hard by the ongoing credit crisis and has been looking to shed assets and streamline operations, which helped lead to the deal with Morgan Stanley.
Morgan Stanley is one of two remaining large investment banks -- along with Goldman Sachs Group Inc. -- that withstood the carnage the sector endured last September when Lehman Brothers Holdings Inc. filed for bankruptcy protection and Merrill Lynch & Co. sold itself to Bank of America Corp. To remain independent, both Morgan Stanley and Goldman Sachs became bank holding companies, the regulatory structure for traditional commercial banks.
Morgan Stanley has endured trouble of its own during the ongoing turmoil, though not as much as Citigroup or Lehman. New York-based Morgan Stanley lost $2.37 billion during its fiscal fourth quarter as it took a wide range of losses on the value of some of its investments.
Shares of Morgan Stanley rose 57 cents to close at $20.80 Monday.
http://biz.yahoo.com/ap/090202/morgan_stanley_job_cuts.html?.v=3
Stocks End Mixed; Financial, Energy Equities Rebound:
Evelyn Rusli, 01.23.09, 05:30 PM EST
http://www.forbes.com/2009/01/23/oil-citigroup-ge-markets-cx_er_0123transclose.html?partner=yahootix
The Street could not pull off a strong rally on Friday. Financial and energy stocks rebounded, but the Dow fell 45 points at the close. The index fell 2% for the week. The S&P 500 gained four points, though, and the Nasdaq rose 12 points.
Oil advanced as the dollar tilted south. Crude gained $2 to nearly $46 a barrel. Chevron added 1%, while Royal Dutch Shell gained 3%.
Citigroup led the financial sector, as President Obama confirmed that the next stimulus package could be ready by mid-February. Morgan Stanley and Bank of America were also up sharply.
General Electric (nyse: GE) failed to rebound after a disappointing profit report. The blue chip fell 11% at the close.
Intel (nasdaq: INTC) managed a gain, adding 2% despite the somber outlook for semiconductors and computers in 2009. On Friday the chip maker said Chairman Craig Barrett will retire in May after three decades at Intel. Board member Jane Shaw will replace Barrett.
Smith Barney customers could enjoy Morgan deal...
NEW YORK (MarketWatch) -- If Morgan Stanley's acquisition of Smith Barney goes through, some customers of both brokerage platforms would benefit, according to analysts.
http://www.marketwatch.com/news/story/some-customers-benefit-if-morgan/story.aspx?guid={5F8F03A9-0668-48AF-BF4A-E0CC008E3A95}&siteid=yhoof
A modest stock decline for January 12! Not bad! I'll give Morgan Stanley some consideration for investing.
Morgan Stanley Posts Wider-Than-Expected Loss:
http://www.cnbc.com/id/28257402
Bernstein sees loss at Goldman, cuts M. Stanley view:
Monday November 17, 9:48 am ET
(Reuters) - Bernstein Research analyst Brad Hintz became the latest to join the ranks of analysts expecting a fourth-quarter loss at Goldman Sachs (NYSE:GS - News), as he expects the company to be hurt by writedowns amid weak credit market conditions.
Hintz, who also slashed his earnings estimates on Morgan Stanley (NYSE:MS - News), expects the former investment banks to suffer as global economic conditions continue to deteriorate.
Separately, theflyonthewall.com reported that Citigroup cut its price target on Goldman shares to $125 from $150.
Shares of Goldman fell 5 percent before the bell, while those of Morgan Stanley slid 3 percent.
Bernstein's Hintz expects Goldman Sachs to post a fourth-quarter loss of 54 cents a share, hurt by writedowns related to its investments in Industrial and Commercial Bank of China Ltd (Shanghai:601398.SS - News; HKSE:1398.HK - News; ICBC) and its private equity holdings.
Goldman is likely to lose $800 million from its investment at ICBC, due to the company's declining equity value on the Hong Kong Stock Exchange, Hintz said.
Goldman may also face reduced fixed income sales and trading revenues due to the difficult credit market conditions, Hintz, who had earlier expected a fourth-quarter profit of $2.12 a share at the company, said in a note to clients.
Over the past two weeks, a slew of analysts at brokerages including Fox-Pitt Kelton and UBS have forecast that Goldman will post a fourth-quarter loss, which would be its first ever as a public company. The analysts' expectations for a loss range between $2.50 per share and 40 cents a share.
MORGAN TO OUTDO GOLDMAN?
"Because Morgan Stanley is less reliant on capital intensive trading revenues than Goldman Sachs, Bernstein expects Morgan Stanley's results will be stronger than Goldman's this quarter," Bernstein's Hintz said.
But he cut his fourth-quarter estimates on Morgan Stanley to 30 cents a share from $1.12 a share, citing a "difficult operating environment" during the quarter.
Hintz prefers Morgan Stanley over Goldman Sachs for its greater revenue diversification, lower reliance on capital intensive trading revenues and the earnings stability that its retail brokerage business provides.
The analyst has an "outperform" rating on Morgan Stanley, while he rates Goldman Sachs "market-perform."
Goldman Sachs and Morgan Stanley became bank holding companies regulated by the U.S. Federal Reserve in September, after Lehman Brothers (Other OTC:LEHMQ.PK - News) failed, Merrill Lynch (NYSE:MER - News) agreed to be bought and the financial markets spun out of control.
The change, effectively killing off the investment banking model that had dominated Wall Street for more than 20 years, enabled Goldman and Morgan Stanley to take deposits, gain easier access to financing and gave them more flexibility to buy retail banks.
On the investment banking front, the current quarter was weak for the two surviving securities firms with weak underwritting volumes, analyst Hintz said.
"The potential for negative marks remains real as hedge funds, banks and other institutions continue to de-lever their balance sheets," he said.
While mergers and acquisition advisory revenue is likely to hold up the quarter, it is not likely to offset the weakness from the underwriting side of the business, Hintz said.
Goldman shares closed at $66.73 Friday on the New York Stock Exchange, while those of Morgan Stanley closed at $12.03.
http://biz.yahoo.com/rb/081117/business_us_goldmansachs_research_bernstein.html?.v=3
Analysts cuts estimates on Goldman, Morgan Stanley:
http://biz.yahoo.com/ap/081114/goldman_morgan_stanley_mover.html?.v=1
Morgan Stanley names 2 to head retail bank:
Wednesday November 12, 2:27 pm ET
Morgan Stanley names 2 Wachovia executives to run firm's new retail banking business:
NEW YORK (AP) -- Morgan Stanley on Wednesday said it will hire two top executives from Wachovia Corp. to help launch its new retail banking business.
Cece Sutton was named president of the new group as part of a plan to bring in deposits that will help offset riskier segments of Morgan Stanley's business.
At Wachovia, which is being acquired by Wells Fargo & Co., Sutton was head of retail and small business banking with responsibility for 33,000 employees across 3,300 locations.
Morgan Stanley also named Jonathan Witter as the retail bank's chief operating officer. He was head of distribution for Wachovia.
Morgan Stanley, the nation's No. 2 securities firm, converted into a bank holding company in September.
http://biz.yahoo.com/ap/081112/morgan_stanley_appointments.html?.v=1
Morgan Stanley Plans Broad Job Cuts:
http://www.cnbc.com/id/27680358
Morgan Stanley reappears in Platts oil window-trade:
http://www.reuters.com/article/marketsNews/idINLB27626620081111?rpc=44
I actually grabbed it before the drop at 13.90 bought more at 11.80 and doubled down at 10.30 for an 11.57 average. sold the whole thing at 15.10 before the close.
did ok but it would have been a lot better with out that stinking 13.90. Staging buys saves me about 99% of the time, can't seem to find those bottoms like some.
Yup
I posted the drop on our board and thought it strange the lights were out here as if know one was home.
I hope you grabed it!
It is amazing that MS is a stock that had a 52% trading range today but because I-Hub is geared toward P&D Promoter Scams that no one even posted on this board.
no weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee's
no kaaaaaaaaabooooooooooooooooooooom's
no to daaaaaaa moooooooooooooooooooon's
unfriggingbelievable!!!
Shares of Morgan Stanley (MS) staged a bullish "island reversal" over the last few days with a gap down followed by a gap up. It also offered a bullish stochastics crossover from oversold levels. While I am not expecting shares to go straight up from here (especially after a 95% one-day move), It does appear that the stock has bottomed and I expect higher prices over the intermediate-term.Investors should begin to initiate long positions ASAP.
dang wish i had bot last thur at 7
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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.
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