The bank said that it lost about $1.6 billion in 2009 — after a $18.72 billion loss the year before. It also reported $7.6 billion loss in the fourth quarter, mostly as a result of a $10.1 billion accounting charge tied to the repayment of its bailout money, which ended any chance of a profit. Last year, the bank had a fourth quarter loss of $8.29 billion or a $1.72 a share.
At Citigroup, most of the fourth-quarter loss stemmed from an accounting charge linked to the company's exit from the government's Troubled Asset Relief Program. Even without that charge, Citigroup would have lost $1.4 billion in the period.
Morgan Stanley (MS.N) has been sued by a Virgin Islands pension fund that accused the Wall Street bank of defrauding investors by marketing $1.2 billion of risky mortgage-related notes that it expected to fail.
The lawsuit filed December 24 in Manhattan federal court said Morgan Stanley collaborated with credit rating agencies Moody's Investors Service and Standard & Poor's to obtain "triple-A" ratings for notes marketed in 2007 as part of a collateralized debt obligation (CDO) known as Libertas.
Last week ago, Institutional Risk Analytics interviewed Josh Rosner of Graham Fisher & Co and David Kotok of Cumberland Advisors, and the discussion is one of the most direct and revealing of the true political nature of the financial collapse I have yet seen. As I have written before, using reports from the Fed, FDIC, and Comptroller of the Currency, the financial problems are very tightly concentrated in a handful of the largest banks, with over 8,000 plus smaller and regional banks having declined to participate in Wall Street’s derivatives madness.
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