We Don't Have To Have All of Our Cake Today

During the heyday of takeover lending and junk-bond financing, the patrician investment firm Morgan Stanley was often the butt of ridicule. While more aggressive firms plunged into risky new techniques, Morgan, despite a leading role in corporate takeovers, seemed stuck in its stodgy habit of underwriting stock for blue-chip companies and selling investment-grade bonds. The new breed was playing high-stakes Monopoly, the joke went, while the stuffed shirts at Morgan were playing Trivial Pursuit. But no one is laughing at Morgan's expense anymore. The firm, founded in 1935, is the most profitable on Wall Street, posting record earnings of $443 million...

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