Morgan Stanley Chief Executive Officer John Mack said the credit crisis will last ``a couple of quarters'' longer as it spreads to commercial real estate, European lenders with subprime holdings and U.S. midsized banks.
``It's going to be a difficult year for the Street,'' Mack said to reporters before the company's annual meeting today in Purchase, New York. Mack, 63, told shareholders the markets are facing the most difficult conditions he's seen in 40 years.
The world's biggest banks and brokerages have reported more than $230 billion of losses and writedowns since the start of last year because of the collapse of the subprime mortgage market. Morgan Stanley, the second-biggest U.S. securities firm, said in a report earlier this month that turmoil in the credit markets may last an additional five to seven quarters, exceeding the Asia currency crisis and the bursting of the dot-com bubble.
To weather the slowdown, New York-based Morgan Stanley will need to maintain ``a lot of liquidity,'' Mack said, so the company is only ``gingerly'' investing in distressed assets. He said the U.S. subprime crisis may be almost over, though European companies holding such assets will take longer to recover.
Mack was re-elected to the company's board with about 95 percent of shareholder votes, the company said at the meeting. The rest of the board received more than 90 percent of the vote.
Mack and the other directors overcame criticism from pension funds including the California State Teachers' Retirement System, which said last week it withheld its votes for several board members, including Mack. CalSTRS, as the fund is known, said shares of the company have underperformed the market and the company's biggest competitors.
Morgan Stanley, which has dropped 10 percent this year on the New York Stock Exchange, fell 54 cents, or 1.1 percent, to $47.55 in 10:16 a.m. composite trading.
No comments:
Post a Comment