Whilst the tabloids worry about Venture capitalist's immodest earnings , the 2nd largest stockbrokers in the world (by volume) Morgan Stanley's income increased a whopping 40%.
For Q2 ending May 31st 2007 MS posted net income of US$2.6 billion, or US$2.45 a share, compared with US$1.8 billion, or US$1.75 a share, for Q2 2006.Gross revenue soared 32% to US $11.5 billion.
Chairman and CEO John Mack(appointed June 30, 2005) said, "Morgan Stanley ...(have) now achieved seven straight quarters with ROE above 20 percent, and we're well on our way to reaching our goal of doubling 2005 earnings over five years."
Simultaneously MS have opened their MSREF VI International Real Estate Fund fund, with $8 billion of equity commitments in which investments will include non-U.S. real estate assets, portfolios and companies, primarily in developed markets. To date, the MSREF funds have acquired real estate assets totaling $83.5 billion, with assets under management of $31.6 billion.
(MS total assets under management or supervision at May 31, 2007 were $560 billion, up $106 billion, or 23 percent, from a year ago.)
Kevin Warsh a member of the Board of Governors of the Federal Reserve System (nominated by POTUS and there until 2018) is an ex employee of MS working there from 1995 to 2002, and made VP and Executive Director in the Mergers and Acquisitions Department.
His appointment was famously described by Noam Scheiber , Editor of the New Republican ....
"Other than a Harvard Law degree and four years in the White House, the only qualification that jumps out at you is the $165,000-plus his father-in-law has donated to various Republican committees since 2002. Warsh may be perfectly capable of hazarding opinions about the future of the economy. But, by that standard, there are tens of thousands of people entitled to a seat on the Fed. ...Appointing someone like him to the Federal Reserve board dramatically lowers the bar for future appointments, which makes it more likely that the body of powerful technocrats will come to be dominated by political hacks. ...The only way you appoint Kevin Warsh to a seat on the Federal Reserve board is if you have little respect for the practice of economic policy-making and you're not ashamed to admit it."...but he is married to the daughter of Ronald Lauder , friend of Ariel Sharon, Chairman of the New York Port Authority who sold the WTC to Larry Silverstein who also has half shares in CETV with Sir Ronald Cohen's Apax Partners who will be replacing the role of Lord Levy the midget Karaoke King (after his FO funded monster leaving bash last night) as the representative for Israel and it's many friends in the UK Government.
More rate rises on the near horizon
As the UK market chewed over the Bank of Englan's last MPC minutes and Mervyn King being out voted over a UK rate rise, it is worth noting that the yield on 10-year US Treasury notes - which influences US interest rates on mortgages and corporate loans, gained almost 4 basis points, or 0.04 percentage point, to 5.12 percent.