And now it's Morgan Stanley's turn

As expected, Morgan Stanley announced writedowns of $3.7 billion due to non-performing mortgage-backed loans. This is a much different from writedowns compared with the much larger ones at other firms, according to the New York Times. Morgan Stanley's writedowns were less related to CDOs than to proprietary trades that went sour. Recall that the firm's quantitative unit lost a net $480 million over the summer. Recall also that Morgan Stanley lost $395 in a single day during that time! We've been talking about the importance of proprietary trades to bank earnings. This is an example of why these firms deserve low multiples. You can't win at blackjack forever. So far Goldman Sachs seem to have the longest winning streak, but it cannot last indefinitely.

For more:
- here's the New York Times article

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- Morgan Stanley the next to announce writedowns?
- Rumors about Goldman Sachs intensify