Morgan Stanley hit by loss

Morgan Stanley hit by loss

Bloomberg
Chief Executive Officer John Mack is forgoing his bonus for a second straight year after a loss of investor confidence forced Morgan Stanley to become a bank, accept $10 billion from the U.S. and sell $9 billion of preferred stock to Japan's Mitsubishi UFJ Financial Group.

Goldman Sachs Group on Tuesday reported a $2.1 billion quarterly loss, its first as a public company.

"The earnings model that they've had in the past is gone," said Matt McCormick, portfolio manager at Cincinnati-based Bahl & Gaynor, which oversees $2.9 billion for clients. "We still have many economic hurdles in front of us."

Goldman Sachs and Morgan Stanley are the only U.S. securities firms to survive this year after Lehman Brothers Holdings went bankrupt, Merrill Lynch was sold to Bank of America and Bear Stearns was acquired by JPMorgan Chase.Banks and brokerages worldwide have disclosed more than $740 billion of writedowns and credit losses since the collapse of the subprime mortgage market last year, according to Bloomberg.