NEW YORK (Reuters Breakingviews) - Morgan Stanley has a foot in two worlds, both of them distorted in ways that help the Wall Street firm. On Wednesday the company run by James Gorman reported a 57% increase in earnings over 2020, driven by a surge in its stock and bond trading business. Banks can’t rely on a repeat of that, but a stock-fueled M&A spree leaves Morgan Stanley well placed for what comes after. The $5 billion increase in trading revenue Morgan Stanley reaped last year reflects a street-wide windfall. The biggest five investment banks collectively made $28 billion more than a year earlier, thanks to volatile markets that were kept in working order by supportive central banks. Morgan Stanley isn’t the most sensitive to that kind of move – trading provides just under 40% of total revenue, versus nearly half at Goldman Sachs – but its 30% annual increase in the fourth quarter comfortably beat peers. Gorman put the odds of that continuing at “less than 50%” on Wednesday; Goldman warned something similar the day before. So the question becomes which of the Wall Street firms is best positioned to live without profitable market swings. Big lenders like JPMorgan and Bank of America suffer when interest rates and loan demand fall. Goldman too has been pushing into retail banking. Conversely Gorman’s focus is on the stable business of wealth management. Last year he bought online brokerage E*Trade Financial and is in the process of acquiring asset manager Eaton Vance for a combined $20 billion, most of it in shares. E*Trade attracted almost 1 million new accounts just in the second half of last year. On Wednesday Morgan Stanley raised its estimate of how much money it will save from bringing E*Trade’s low-cost deposits onto its own balance sheet. That hasn’t gone unnoticed – at $136 billion Morgan Stanley trades at almost 1.5 times its estimated book value a year from now, according to Refinitiv, its highest since at least the financial crisis. The post-Covid-19 world may be different, but still weird in its way. Retail investors have piled frantically into online stock trading, and rising markets together with rock-bottom savings rates may continue that trend. The rich will keep getting richer, to the benefit of wealth managers. It’s fair to say Gorman has read the room.