Morgan Stanley's loss bigger than expected

Morgan Stanley reported a fourth-quarter loss of $2.24 per share ($2.3 billion), which was much worse than the 35 cents analysts were predicting. Earnings were weak across the board. Fixed income sales and trading net losses were $1.2 billion. Other sales and trading net losses of approximately $1.1 billion primarily resulted from net mark-to-market losses of $1.7 billion on loans and commitments. Investment losses were $1.8 billion.

The big issue here is whether this is the bottom. Is this the bank's attempt to get all the bad news out at once? That remains to be seen. But Morgan Stanley will be busy. It noted its top priorities going forward. It will shift away from balance-sheet oriented businesses, which includes prime brokerage and prop trading. It will also build a retail bank and slash costs to the tune of $2 billion annually.

For more:
- here's the release

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