Morgan Stanley: Falling knife

John Mack’s project to make Morgan Stanley more like Goldman Sachs has come undone. The firm’s $9.4bn fourth-quarter write-down, mostly on one ill-conceived subprime mortgage trade, is a huge embarrassment. It overshadows good work elsewhere and raises questions about the firm’s strategy. After Mack returned to Morgan in a blaze of glory in 2005 he set about encouraging risk-taking. But the issue was always whether risk-taking would outrun risk control - the discipline so much in evidence at Go...