Reggie Middleton

Morgan Stanley Shorts Brought the Short Ban

I have to break rank here and totally disagree with you. Morgan Stanley had a very bad earnings report that was dressed up in lipstick, just like Palin's pitbull soccer moms. Are you saying that MS had a good quarter because you actually went through the numbers yourself, or are you just repeating what you heard others say?

* Morgan Stanley's reported revenues increased 1% y-o-y to $8,049 mn. However excluding a pre-tax gain of $745 mn and $1.5 bn impact of widening credit spreads on firms own debt, revenues declined 27% to $5,804 mn in 3Q2008 over 3Q2007.
* As result of slowdown in capital markets activity, Morgan Stanley's M&A transactions, global IPO and debt volumes declined 63%, 66% and 46%, respectively.
* Morgan Stanley's leverage declining to 23.5x in August 2008 from 25.1x in May 2008. However Morgan Stanley's level 3 assets-to-total assets increased from 6.7% as of May 2008 to 8.0% as of August 2008.
* As of August 2008, Morgan Stanley's exposure towards U.S. subprime mortgage stood at a 44.3% of its shareholder's equity.

Does this sound like a good quarter or earnings report to you???

For more on why Morgan Stanley was really shorted, learn from someone who actually put his money to work to short Morgan: boombustblog.com/index... and most importantly, be careful about repeating what you hear without verifying it for yourself.