This certainly didn’t take long.
Less than a year after Wall Street was nearly extinguished, investment banks are already responding to shareholder demands for great returns by ramping up risky trading. We predicted this when the second quarter earnings were released. Once again, everyone wants to trade like Goldman Sachs.
Morgan Stanley is in a hiring push that will add as many as 400 trading and sales positions as it tries to revive profits in areas such as fixed-income trading, emerging markets and foreign exchange, according to people familiar with the situation.
Walid Chammah, co-president of the Wall Street firm, said in an internal meeting last month that the hiring plan is a “strategy of rebalancing and repositioning” fixed-income and equities trading, according to these people. The new hires will be split evenly between both sides.
“These hires are a good step because Morgan Stanley cut back substantially from fixed income in 2008, and they just didn’t anticipate the big recovery,” said Brad Hintz, an analyst with Sanford C. Bernstein & Co.
Morgan Stanley has lagged behind rivals since taking on a more conservative stance to survive the financial crisis. But that caution has come at a price: three consecutive quarters of red ink, while Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. reaped profits. Morgan Stanley Chairman John Mack has said parts of the firm got too cautious following its near-death experience last year, and the firm has been scouring Wall Street looking for talent.
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