Investment bank Morgan Stanley on Thursday reported a $4.2 billion profit for 2011, amid a late year loss that was not as bad as Wall Street feared. The New York-based bank said it lost a modest $227 million in the fourth quarter, helping to pull profits for the full year down around seven percent from 2010. It has been a difficult year for the firm, with thousands of job cuts announced as well the departure of chairman John Mack. Despite the downscaling, Morgan Stanley still spent $16.4 billion on compensation. Much of the fourth quarter loss was thanks to a loss of $1.7 billion related to municipal bond insurance firm MBIA.