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David Faber: Morgan Stanley Stronger Than It Looks

CNBC.com
Wednesday, 22 Apr 2009 | 1:35 PM ET

Morgan Stanley posted a first-quarter loss that was much wider than analysts expected; it also slashed its dividend.

Morgan Stanley Swings to Q1 Loss
Morgan Stanley cuts its quarterly dividend by 81% in a move that will save $1B/year, reports CNBC's David Faber.

But CNBC's David Faber reports that there's more to the story than what's on the surface.

"There are things [bank earnings and guidance] we've talked about that weren't quite as good as they seemed," said Faber. "Now, here it's the opposite: not quite as bad as it seems."

Though Morgan reported losses in earnings per share and net income, and revenue came in less than expected, "a lot of that has to do with credit spreads," said Faber.

"For some time now, we've watched Citi have a significant gain on its credit spreads. In this case, though, it's a different story."

Specifically, Faber noted that in two different types of asset ratios, Morgan Stanley looks better than JPMorgan Chase and Wells Fargo.

Watch the video above for more from this Faber Report.

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