A Refreshed Outlook on Morgan Stanley

I have refreshed my outlook on Morgan
Stanley. It's valuation has increased due to the overall increase in
book valuation of its peer group. Positives include revenue gains
through the Smith Barney acquisition, while many of the negatives of
the last two years remain the same. There has been a significant change
in valuation estimates, and I have included a detailed description of
the source of the changes in the linked subscriber document below.

Morgan Stanley, appears to have reacquired the title of the "Riskiest Bank on the Street" with iincreasing VaR and
declining risk adjusted returns that reflect growing risk in its investment
portfolio, which is rife with assets that I am quite bearish on.

Morgan Stanley's aggregate trading and non-trading VaR continued to
increase in 3Q09, reaching $168 mn with the risk adjusted return on capital
(RAROC) continuously declining to 22.9% in 3Q09.

 
 

The latest update for all subscribers:  Morgan Stanley Forensic Outlook: Q1 2010 2010-01-05 04:20:36 504.53 Kb

Free Research: The Riskiest Bank on the Street

Historical Subscription Research

 Morgan Stanley_final_040408 2008-08-30 06:37:54 1.38 Mb

 MS Simulated Government Stress Test 2009-05-05 11:36:25 2.49 Mb

MS Stess Test Model Assumptions and Stress Test Valuation

 Morgan Stanley ABS Inventory 2008-08-30 06:37:32 1.65 Mb

Comments

[bugs_]

Reggie have you looked at GE and GE Capital?

Is there enough transparency to?

[Reggie Middleton]

I looked at GE about a year and a half ago, right before they took the big fall, but not recently. You should be able to find some stuff on my site with a search.

[Chopshop]

agree with ya on MS.

to play devil's advocate: they're doing something right over there ...

Jan. 4 (Bloomberg) -- Morgan Stanley promoted Jonathan Pruzan and Eric Bischof to run the investment-banking group that caters to financial institutions, the busiest industry for dealmaking last year as the government bailed out lenders.

Pruzan is legit; one of the fastest rising stars.

My clients look to me for honest strategic guidance and counsel," he says. Pruzan, a native New Yorker and a self-described, "honest, direct, not the type to sugar coat things," kind of person, still enjoys the same aspects of his job that he found attractive when he started: The strategic aspects, the deal dynamics and trying to build new relationships. His most notable and memorable deal (and IDD's 2006 deal of the year) was advising General Motors in its 51% sale of GMAC to Cerberus Capital. "While you're in the middle of it, it's quite difficult, but when you're done and successful, you feel quite good about it."

[Reggie Middleton]

A big management shake up is probably what all (or at least most) of the big TARP recipient banks need. It is amazing the activist shareholders haven't demanded.