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AP
Posted: 2007-12-19 07:56:04
NEW YORK (AP) - Morgan Stanley , the No. 2 U.S. investment bank, on Wednesday reported a larger-than-expected fiscal fourth-quarter loss due to a $9.4 billion write down from its exposure to sub prime and other mortgage-related investments. The company also said China's government-controlled investment vehicle, China Investment Corp., has invested $5 billion to help replenish its capital. And Chairman and Chief Executive John Mack said because of the poor performance, he would not take a bonus this year.
This will probably move the stock market lower today. Wow, writing down over $9 billion in investments. So, if their portfolio of mortgage backed securities is diversified and they are taking $9 billion in write downs for this quarter, how much do they own in mortgage backed securities. The failure rate could be as high as 25% if most are sub prime, but they don't loose all the money. When they foreclose they should recapture at least 50% of their investment, unlike investing in ENRON.
read the full story:
http://money.aol.com/news/articles/_a/morgan-stanley-post-loss-on-4q-writedown/n20071219075609990004
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