The Brits hate to be the bearers of bad news but if they have to, they have to. Read more »
Strong earnings from Morgan Stanley today, with a top-line beat and lots of positive commentary on the call about converting their Mitsubishi preferred shares and gaining recognition in trading businesses, have MS up almost 10% so far today. Every story about MS earnings seems to be a story about how they’re doing versus Goldman Sachs, and so we may as well just say now: pretty good.
How’d they do it? Two possibilities come to mind:
1. Improved client facility with speed dial.
2. Increased aggressiveness at Morgan Stanley while GS is reducing value-at-risk and complaining about how hard it is to predict political events.
We wanted to figure out which was more important. So we cooked up a toy chart showing the ratio of quarterly trading (FICC and equities) revenue to average daily VaR, arguably a rough measure of the trading performance of those businesses. And here it is.
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While many on Wall Street focused on the second quarter earnings of Lehman Brothers, they may have overlooked something odd that occurred behind the scenes. In connection with this morning’s earnings report, Lehman issued a detailed financial appendix breaking down its balance sheet by various asset groups. But behind the numbers there was another story–the story of a persistent bit of data that no one caught until it was too late.
More after the jump.