Morgan Stanley profits soar like its the 80s all over again

Wall Street’s having flashbacks.

Morgan Stanley’s revenue surged in the third quarter after a rough start to the year, the latest major bank to see a comeback based on nuts-and-bolts bond trading that had fallen out of fashion in tough global markets.

James Gorman’s bank reported $1.6 billion in profit on Wednesday for the three months ending Sept. 30, a 57 percent increase from the same period a year ago. About $1.5 billion of that came from trading bonds, according to the report.

Morgan Stanley follows Goldman Sachs, Citigroup, and Bank of America as major powerhouse traders got a boost from buying and selling debt, calling back to the go-go days of the 1980s, when banks like Salomon Brothers and Lehman Brothers did little else to make huge profits.

Credit markets were “benign” during the last quarter, thanks to the European Central Bank buying bonds after the Brexit vote, the bank’s CFO, Jonathan Pruzan, said during the analyst call.

Gorman’s employees were compensated well — pay rose 19 percent during the quarter — though the CEO said during the Wednesday morning call there are about 25 percent fewer employees than there were a year ago.

During the call, an analyst asked about Massachusetts’ suit filed earlier this month against Morgan Stanley for “unethical” loan sales — a practice that was first unearthed by The Post in March.

Gorman said that the bank’s practices weren’t going to change, and doubled down on the bank’s position that they did nothing wrong and will fight the charges.

“We are not changing things,” Gorman said. “We run our business consistent with the values of doing everything we can to support our clients and we’ll continue to do that.”

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