Morgan Stanley's exposure to commercial real estate is one of the reasons why analysts expect the New York company to report on Wednesday a net loss of $555m, according to Thomson Reuters. That would be the firm's third quarterly loss in a row.

Much of Morgan Stanley's red ink will come from an adjustment to borrowing costs and paying back the Troubled Asset Relief Program. But bulking up on commercial real estate when times were good also is taking a bite out of the bottom line now. Morgan Stanley, before hedges, had about $18bn in such exposure in its institutional securities unit as of March 31, less than many large commercial banks but double the size of Goldman's bets.

Wall Street Journal