China extends lifeline to Morgan Stanley
China Investment Corporation helps Morgan Stanley to stem its losses with a $5 billion capital infusion. Meanwhile, CEO John Mack agrees to forego his 2007 bonus.
Morgan Stanley has declared a $9.4 billion fourth-quarter mortgage-related write down and has said China Investment Corporation will invest $5 billion to buy up to 9.9% of the US bank.
Six weeks ago, on November 7, Morgan Stanley indicated it was taking a write down of $3.7 billion of subprime assets based on valuations as of October 31. It has now taken another $4.1 billion of write downs based on subprime trading positions on November 30, taking the total to...
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