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Opening Bell: 04.22.09

Morgan Stanley Posts Loss (MS)

Morgan Stanley reported a net loss applicable to Morgan Stanley for the first quarter ended March 31, 2009 of $177 million, or $0.57 per diluted share (reflective of preferred dividends),(3) compared with net income applicable to Morgan Stanley of $1,413 million, or $1.26 per diluted share, a year ago. Net revenues were $3.0 billion, 62 percent below last year's first quarter. Non-interest expenses of $3.9 billion decreased 33 percent from a year ago. Compensation expenses of $2.1 billion decreased 46 percent from a year ago, primarily reflecting lower revenues. Non-compensation expenses decreased 9 percent, reflecting lower levels of business activity and firm-wide initiatives to reduce costs.

Freddie Mac David Kellermann official found dead
Suicide. Sad news.
Treasury Weighs New Mortgage Subsidies (Reuters)
"The Treasury Department is considering giving banks and investors billions of dollars in fresh incentives to modify troubled mortgages and save homeowners from foreclosure, sources familiar with official deliberations said.
Under one scenario, investors in second liens would receive a cash payment if they agree to ease the terms of troubled loans and accept a smaller return on their mortgage investment, the sources said.
During the height of the housing boom, some borrowers were able to buy a home with no downpayment by adding a second lien and many of those loans are now failing as the economy and housing market struggle."
Geithner Can Move Markets (FT)
"Tim Geithner, US Treasury secretary, on Tuesday sparked a rally in financial stocks after he said the "vast majority" of the nation's banks are well-capitalised and damped investor fears that the government will wipe out their holdings.
However, Mr Geithner conceded the massive effort by the US authorities to rescue the banking system from the crisis was showing only "mixed" signs of success."
Bill Set To Address Credit Cards (Reuters)
Members of the Hill are expected to address Credit Cards next, going after the evil empire that's charging fees to people to buy stuff they can't afford (and probably won't/can't pay back). We'll see the banks respond to this by cutting credit (if not all together, then) substantially for those that are low-income high-risk; there's no upside to floating these people lines when they run a risk of default that can't properly be accounted for.
"A Congressional panel is expected to approve legislation on Wednesday that would curb high credit card fees and penalties assessed by many banks that have benefited from the federal government's financial bailout program.
The pro-consumer bill, which would mean sweeping changes for banks that issue cards, is an important test of the political will of Democrats who are pushing for U.S. financial regulation reform."