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Morgan Stanley reported 2.2 billion USD profit in Q3 2011

Morgan Stanley stayed profitable in the third quarter, pretending to be better than expected. The bank failed to calm fears and that its exposure to the Eurozone can cause serious losses. The company reported net profit of 2.2 billion USD, James Gorman, executive director of Morgan Stanley said the bank was able "to successfully navigate through turbulent markets". The real profit of Morgan Stanley, however, is much lower. The results of the bank and those of other financial institutions on Wall Street, are inflated by accounting tricks that allow them to report earnings on the basis of the decline in value of own debt.
The adjustment of the debt score equals 1.12 USD of profit per share amounted to 1.15 USD, the bank account. The analysts had expected the bank to account for losses. For the third quarter, Morgan Stanley reported earnings of 9.9 billion USD compared with 6.8 billion USD for the same period last year. Profit of 1.15 USD per share versus a loss is 0.07 USD per share in the third quarter of 2010. In recent weeks, concerns about the stability of the bank increased by rumors of its huge derivative exposure to French banks, which in turn are at risk of exposure to debt of Eurorone countries.
On Wednesday, Morgan Stanley announced details of their exposures to the Eurorone, including the French banks in an attempt to allay fears. The Bank announced that it has a net exposure of 2.9 billion USD to its French partner, but without mentioning its gross exposure.