Wednesday, April 14, 2010

Morgan Stanley loses another $5.4 billion

Morgan Stanley was forced to take $9+billion due to bad trades and now they lose another 5.4 billion. Can you please tell me more about all that hedging that has been going on? How about those credit default swaps and diversified portfolios? Well, these professionals are demonstrating exactly why they can not handle 1:1 leverage let alone 100:1 leverage. But don't worry because the Fed and the discount window are there and will trumpet every interest payment received but say nothing about the principle that has not been - that's the taxpayers problem!

 Morgan Stanley fund may lose $5.4 billion: report

Tue, Apr 13 2010
NEW YORK (Reuters) - Morgan Stanley has told investors that its $8.8 billion real-estate fund may lose nearly two-thirds of its money due to bad investments, according to The Wall Street Journal, which reviewed fund documents.
But by mid-2009, the firm had already written down those losses, according to quarterly financial reports.
The $5.4 billion loss would be the biggest in the history of private equity real estate investing, according to the Journal.
Although Morgan Stanley declined to comment to Reuters, the Journal reported that the company told it that its real estate group has "a long-standing history of investing through many different business cycles over the past two decades."
(Reporting by Helen Chernikoff and Steve Eder; Editing by Gary Hill, Phil Berlowitz)
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