No, this is not good news: Morgan Stanley Second Quarter Profit Surges 131%

[cali]

Morgan Stanley, the last of the so-called “big banks” to release its second quarter earnings report, revealed Thursday that its results were more impressive than those of its competitors: where Citigroup, JP Morgan Chase and Bank of America all reported lower second quarter profit, Morgan Stanley reported that not only did its profit rise above analyst expectations, but it more than doubled compared to what it brought in during the same time in 2013, due in large part to strength in the bank’s wealth management and investment banking segments.

Morgan Stanley said Thursday that it recorded $8.6 billion in second quarter revenue, up 1% over the prior-year period and beating the analyst consensus by more than $400 million. Net income for the quarter came in at $1.86 billion, a 131% increase over the $803 million in net earnings during the second quarter of 2013 and a figure that resulted in an earnings-per-share of 94 cents, a 129% increase over the year-ago quarter. Excluding a tax benefit and a debit-value adjustment, Morgan Stanley’s earnings per share for the quarter was 60 cents per share, a figure that easily topped the 55 cents per share Street estimate.

“Our quarterly results demonstrated solid performance, despite a muted operating environment,” James Gorman, Morgan Stanley chairman and CEO, said in a statement Thursday morning. “We are seeing momentum across our businesses, with particular strength in investment banking, equity sales & trading and wealth management – where profit margins hit 21% for the first time since the founding of the joint venture and assets entrusted to us by clients reached $2 trillion,” he added, referencing his company’s purchase of Citigroup’s Smith Barney wealth management outfit.

Wealth management revenues increased to $3.7 billion during the quarter, up from $3.5 billion in the year-ago period. The bank said that client assets exceeded $2 trillion and that fee-based asset flows were $12.5 billion. Morgan Stanley’s investment management segment also increased its revenues — to $692 million, up from $673 million during the same time in 2013 — though the gains from these two business divisions were slightly offset by lower revenue from the bank’s institutional securities segment, which recorded $4.2 billion in revenue, down from $4.4 billion one year ago. The segment was negatively affected by the fixed income and commodities trading division, which saw revenue drop $200 million during the quarter due to declines in foreign exchange on lower volatility.

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http://www.forbes.com/sites/maggiemcgrath/2014/07/17/morgan-stanley-second-quarter-profit-surges-131/

[badtoworse]

1. Would it have been better if they had lost a lot of money? If so, why?

[cali]

4. as woo said: the rich get richer. If you can't see why this is bad news I seriously

question your understanding of what is happening economically in this country. It's HOW they had such a good quarter that you should be looking at in order to grasp why this is not good news.

[badtoworse]

6. Let's say the I Banks lost a pile of money.

There is no reason to believe that their loss would represent a gain for the rest of us. IMO, a big loss by the banks would indicate that things were getting much worse for the economy. Given that, it seems likely that we would all be worse off in the short to medium term. By the same token, there is no reason to believe that the rest of us would gain a lot if they did well. Let's call it limited upside if they do well.

In summary, for the majority of people, it seems to be limited upside vs. potentially significant downside. I would strive to improve the upside, but I would avoid the downside at all costs.

Maybe way may of looking at it is too simplistic. Why don't you expand on your opinion?

[cali]

8. Are you having trouble with reading comprehension?

I didn't say it would be good if MS lost money, did I? I explained that how they made this enormous profit reflects the growing disparity in our society between haves and have nots.

And given the very recent history of Wall Street banks and businesses and the lack of meaningful oversight still extant, one would have to be blind or stupid not to be cautious about business practices.

[badtoworse]

9. I don't see any commentary that you made.

I reread your post to see if I missed anything and all I see is a cut and paste of the Forbes article. If you made any comments other than "it's not good news", I don't see them.

[woo me with science]

2. The rich get richer...

[onethatcares]

5. the rich get richer quicker

is a great overview of it.

[msongs]

3. lots of profits to be made in the financial rape of the USa and its 99%ers nt

[Tierra_y_Libertad]

7. Sad. It must be a burden for the bosses to find parking spaces for new yachts.