the u.s market is sooooo farked!Credit squeeze set to hit big US...

the u.s market is sooooo farked!

Credit squeeze set to hit big US banks
Citigroup Inc, the largest US bank, may need to write down $US12 billion ($A13.73 billion) of debt and boost reserves for bad loans by $US1 billion ($A1.14 billion) as the global credit crunch deepens, a Sanford C Bernstein & Co analyst said.

Bank of America Corp and JPMorgan Chase & Co, the second- and third-largest banks, may have respective fourth-quarter write-downs of $US5.5 billion ($A6.29 billion) and $1 billion, analyst Howard Mason also wrote in a December 31 report.

"We are trimming our estimates for the fourth quarter of 2007 and 2008 to account for capital markets write-downs, loan loss reserve building, slower net interest margin re-normalisation in 2008 and reduced buyback activity," Mason wrote.

The analyst also halved his forecast for a fourth-quarter write-down at Wachovia Corp, the fourth-largest bank, to about $US1.5 billion ($A1.72 billion) from $US3 billion ($A3.43 billion).

Financial companies have already announced more than $US70 billion ($A80.07 billion) of write-downs tied to the global credit crisis.

Last week, Goldman Sachs & Co analyst William Tanona projected fourth-quarter write-downs of $US18.7 billion ($A21.39 billion) at Citigroup and $US3.4 billion ($A3.89 billion) at JPMorgan.

Mason now expects a fourth-quarter loss of 65 cents per share at Citigroup, and quarterly profit per share of 40 cents at Bank of America, $1.00 at JPMorgan and 30 cents at Wachovia.

He had previously forecast a break-even quarter for Wachovia.

The analyst rates Citigroup and Wachovia "outperform," and Bank of America and JPMorgan "market perform."

Analysts on average expect a quarterly loss per share of 61 cents at Citigroup, and profit per share of 23 cents at Bank of America, $1.01 at JPMorgan and 36 cents at Wachovia, according to Reuters Estimates.