The Fed may have its own ideas, but a "capital flush" Morgan Stanley (MS) clearly wants to boost...

The Fed may have its own ideas, but a "capital flush" Morgan Stanley (MS) clearly wants to boost returns of capital to "long suffering shareholders" (the CEO's words). It's pretty simple math, says James Gorman. Cutting leverage by two-thirds while more than doubling capital, has cut ROE from 20% to 5%. It's time to give some back.

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  • stever10
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    30 Nov 2012, 11:25 AM Reply Like
    , contributor
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    Despite those capital actions - does anyone think they are solvent?
    30 Nov 2012, 12:21 PM Reply Like
  • Sensible Investor
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    How can Gorman possibly tell shareholders he wants to return capital when his firm can't pay for the rest of Smith Barney? Wouldn't that make sense to do first? He's trying to juice the stock to save his job since on his watch shares have declined to 16, and have not improved. If the firm is well capitalized, then prove it by purchasing Smith Barney. The bottom line is that the firm and its management have no idea how to run the businesses they have, lag behind their peers in both size and scale, and cannot retain brokers. The problem with MS is size, and secondary to that is management.


    If Gorman cares about shareholders and clients then he will graciously step down. The firm offshored 22% of itself to a Japanese company, sent jobs to India, and trumpets civics while employees don't get bonuses or raises. Something is wrong with that picture when a CEO comes to America, and then sends jobs overseas in a time of high unemployment. If Gorman wants to be taken seriously, treat EVERYONE with respect, and not just the community for political posturing. Further, keep 100% of MS in America. He doesn't have a grip on reality if he thiks he can return capital while giving everyone else the shaft. Meanwhile, Wells Fargo, Merrill, and JPM are eating his lunch.
    30 Nov 2012, 08:28 PM Reply Like
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