Morgan Stanley has long been compared to its arch-nemesis Goldman Sachs. In fact, comparisons are still being made, and that might be a problem for Morgan Stanley. A recent article in TheStreet.com suggests that the first quarter results may make it tempting for Morgan Stanley to jump back into beat Goldman Sachs mode. Goldman Sachs posted a profit, while Morgan Stanley lost $177 million. Morgan Stanley's average VAR was $115 million in the first quarter. In contrast, Goldman Sachs's VAR came in at a whopping $240 million.

"Morgan Stanley's management must feel pressure to adopt a strategy that relies more on proprietary trading and principal investments," notes the article. My sense is that John Mack may be willing to break ranks and deliver a business model that is far from Goldman Sachs. Perhaps he truly wants to set Morgan Stanley on a more conservative, deposit-centric course. But it's hard to argue with the success of your main competitor.  

For more:
- here's the article

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