Morgan Stanley posts third quarterly loss; rival Goldman Sachs moves way ahead!

Morgan StanleyWeighed down with red ink from the repayment of federal bailout funds and the accounting ramifications of improvement in its debt prices, Morgan Stanley post its third quarterly loss in a row on Wednesday. The $159 million loss figures, essentially resulting from the venerable bank's continuing businesses in the second quarter, were more than the analysts had expected.

The quarter saw Morgan Stanley repaying $10 billion from the government's Troubled Asset Relief Program (TARP); along with incurring a one-time charge of $850 million. In addition, the bank's net revenue was reduced by $2.3 billion owing to the improvement in its debt prices.

Morgan Stanley's rather disappointing fixed income and asset management results came as a hurtful blow for the bank's CEO John Mack, 64; more so as its closest rival Goldman Sachs reported record profits last week.

That Goldman Sachs has moved way ahead of Morgan Stanley is also evident form the fact that it intends paying $1.1 billion to buy back warrants issued to the Treasury Department last October, amid the deepest phase of recession; thereby fully freeing itself from federal clasp.

According to Michael Vogelzang, President of Boston Advisors - an investment firm owning stock in both banks, Morgan Stanley is increasingly becoming a pale comparison to Goldman Sachs. Vogelzang remarked: "At the end of the day, Goldman continues to bang it out."