Morgan Stanley, Merrill Lynch diverge on strategy

It will be fun to watch how Morgan Stanley and Merrill Lynch fare this year, given that their CEOs seem to be embracing opposite strategies. CNBC reports that John Mack, the hard-charging CEO of Morgan Stanley, has decided to stick with Morgan's strategy of aggressively using its balance sheet, hoping to garner Goldman Sachs-like gains via prop trading. His view is that it will be hard to make money doing anything else in 2008. At Merrill Lynch, however, the new CEO, despite his roots at Goldman, seems to be intent on taking chips off the table, to ratchet down the VAR. That seems to be the more conservative approach. I've said it before: live by the balance sheet, die by the balance sheet. Stay tuned.  

For more:
- here's the CNBC article