The difference here between Morgan and Citi (C), Lehman (LEH) and Merrill (MER) is that CEO John Mack has not been running his mouth around town telling everyone “all is well”.
“Given the turbulent environment this quarter, we stayed close to shore and continued strengthening the Firm’s capital and liquidity positions,” John J. Mack, Morgan Stanley’s chairman and chief executive, said in a statement. “The difficult market conditions and lower levels of client activity impacted our results, particularly in fixed income and asset management.”
See, the things is that no one (or at least no one should have) expected the results to be good. So , why tell everyone they would be.
By being quiet, Mack, at least for now has escaped the fate of all his peer except those at Goldman Sachs (GS) who, it should be noted have also kept their mouths shut.
Morgan’s profit, amounting to 95 cents a share, was down from the $2.36 billion it earned last year. Howver, they managed to slightly exceed expectations of 92 cents a share. Revenues from its fixed-income sales and trading unit fell 85% from the same time last year to $414 million, due to losses in mortgage trading and lower revenues in other products.
The firm reported a $519 million loss from loan commitments, including those made to private equity firms. While it lost money on hedges, it saw some gains from marking some holdings to market.
All in all, nothing out of the ordinary, bad, but nothing outlandish. Had Mack been running around telling everyone not to worry, he might be getting nervous about now.
Has anyone learned this lesson yet?????????
Disclosure (“none” means no position):Long C, GS, None
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