Ben's 'too big to fail' list is going to get busy.
Hey what about these non-US "banks" that are holding heavy like Bear Stearns? Will the Fed save them too? Or is this going to be a global central bank group effort?
Capability Tim at the NYFed can mail a 'how-to' document to Buba in care of Threadneedle Street. Obvious nationalisation is so déclassé.
Whitney: Merrill, UBS Face New Writedowns
03/27/08 -
09:16 AM EDT
Marketwatch
Oppenheimer analyst Meredith Whitney on Thursday forecast new writedowns and losses at Merrill Lynch and UBS two more investment banks hit hard amid the deep-rooted credit crunch.
Whitney, who last fall issued an early and accurate call that Citigroup would have to cut its dividend, predicted writedowns of $6 billion and $11.1 billion at the two firms, respectively. She issued the note late Wednesday, after shares of the two firms stumbled in the wake of a bearish note on Citi that predicted $13 billion in writedowns.
Shares of Merrill were falling 2% and UBS shares were up 3.6% in premarket trading. Merrill had fallen 7.2% and UBS sank 3.1% Wednesday. Citi fell 5.8% Wednesday.
Whitney expects Merrill to lose $3 a share in the first quarter, down from her earlier prediction of a profit of 45 cents a share. For the full year, she sees a profit per share of 20 cents, down from her earlier forecast of $4 a share.
UBS could lose $2.72 a share in the first quarter, she said, lowering her earlier outlook of a profit of 72 cents a share. For the full year, she sees a profit of 45 cents a share, vs. an earlier view of a $3.72-a-share profit. The two firms have been among the hardest hit in the credit crunch. Merrill wrote down $14.6 billion in soured mortgage-related investments in the fourth quarter, while UBS wrote down $18 billion.
Whitney's note on Citi Wednesday predicted as much as $50 billion in writedowns for the financial sector. The note also cut forecasts for Bank of America, JPMorgan Chase and Wachovia Bank.
...I saw pale kings and princes too,
Pale warriors, death-pale were they all;
They cried—“La Belle Dame sans Merci
Hath thee in thrall!”
I saw their starved lips in the gloam,
With horrid warning gaped wide,
And I awoke and found me here,
On the cold hill’s side.
And this is why I sojourn here,
Alone and palely loitering,
Though the sedge is wither’d from the lake,
And no birds sing. John Keats
