Earlier this week, a fellow Fool and I discussed the absurdity of Citigroup
Yep. Case in point: Morgan Stanley
"In fact, Morgan Stanley would have been profitable this quarter," said CEO John Mack, "if not for the dramatic improvement in our credit spreads -- which is a significant positive development." It's almost like banks would be better off if credit markets stayed in Threatcon Delta mode. How's that for bizarre incentives?
All odd accounting quirks included, Morgan Stanley lost $177 million, or $0.57 per share on net revenue of $3 billion. Without credit spreads tightening, the bank would have earned $0.37 per share. It also announced a dividend cut to $0.05 per share per quarter. Not too surprising there -- bank dividends have been dead for a while now. The move will bolster common capital by about $1 billion per year.
Which, to be honest, it might not even need. Tier 1 capital now stands at 16.4%, which is about as good as it gets for major Wall Street banks. It's higher than even Goldman Sachs
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