Wednesday, October 24, 2012

Morgan Stanley Earnings Review: Downward Spiral

Morgan Stanley reported QE September 2012 financial results on October 18

Morgan Stanley reported a $956 million net loss resulting in a loss per share of $0.55. The operating loss was a quarter-busting $1.48 billion. This is the 3rd loss per share in the past 4 quarters, 4th in the past 6 quarters, and 5th in the past 9. This sums up overall financial performance or lack thereof. Financial position is weak and capital is marginal. Risk management is ineffective.

Morgan Stanley does this to themselves and to their clients. CEO James Gorman noted 3 quarters ago that MS continues "addressing a number of outstanding strategic and legacy issues." I guess that's one way to say it. Another way to say it is: we lie, cheat, and steal. The general public is not as familiar with Morgan Stanley as they are Goldman Sachs, JPMorgan, Bank of America, Citigroup, et al. in the Wall Street Banksters syndicate. They are just as criminally inclined if not more so.

At QE 9-30-12, I have rated Morgan Stanley an "E-" on a scale of A+ to G-. This is a downgrade from "E+" at the prior QE 6-30-12. The median rating is "D" and the average rating at QE 6-30-12 was "C". Financial position is weighted more than financial performance. The QE 6-30-12 bank ratings review is here.

James P. Gorman, Chairman and Chief Executive Officer, said, “Our third quarter results show a balanced, strategically focused franchise that has attained stronger revenues and executed on key goals. The rebound in Fixed Income & Commodities sales and trading indicates that clients have re-engaged after the uncertainty of the rating review in the previous quarter. We are beginning to unlock the full potential of the Global Wealth Management franchise, having increased our ownership of, and agreed on a purchase price for the rest of, Morgan Stanley Wealth Management. I am confident in our potential to enhance profitability and increase value for our shareholders in the quarters ahead.”


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