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.

We threw in total revenues to trading VaR just for fun. Some thoughts:

1. MS outperformed on this metric - made more money for its level of risk - in 2008, with competitive revenues on a much lower VaR, but that outperformance cratered during the crash and never came back, at least not in trading businesses.

2. But after this quarter it's pretty close again - MS made $4bn in trading businesses in 2Q 2011 on a $145mm VaR, versus $3.5bn and $101mm for GS - suggesting that MS's outperformance is driven not just by more aggressive risk-taking this quarter but also by market share gains and/or better risk-adjusted returns.

3. Goldman and Morgan Stanley made $390k and $310k, respectively, for every million dollars of VaR each calendar day last quarter - or $540k and $420k each trading day.