Best Buy, UBS, Fox Pitt
Grandma, Are we out of the woods yet? Not quite my child...
Best Buy has cut is FY08 guidance, citing soft consumer traffic.
Increased risk, costs and writedowns... UBS analyst Philip Finch:
The world's banks "remain at risk" from as much as $203 billion in additional writedowns, largely because the bond insurance crisis may worsen.
"Risks are rising and spreading and liquidity conditions are still far from normal."
Increased credit costs of 10 basis points would lower 2008 industry earnings to 5.9 from 10%.
Increased writedowns, profits decrease... Fox Pitt analyst David Trone estimates Q1 writedowns and
cut Q1 profit estimates for Goldman Sachs, the biggest securities firm by market value, and three of its largest competitors.
Goldman may report a $1.7 billion writedown from leveraged loans; Goldman had $42 billion of leveraged loans at the end of November.
Morgan Stanley will have to write down an additional $2.2 billion, while Lehman and Bear Stearns face $960 million and $820 million, respectively.
The analyst reduced his Q1 profit estimate for Goldman 51%; Morgan Stanley 18%; Lehman 28% & Bears Stearns 27%.
The Nattering One muses... Grandma, my those are long teeth you have...
The subprime contagion, defined as a sudden awareness of unjustified price levels, inadequate risk mitigation and rising risk premiums.
The contagion has spread from overpriced real estate to MBS to CDO to ABCP to LBO & stock buy back to monoline guarantors to the bond market and to the stock market.
In all cases the virus has attacked grossly overvalued assets which had been leveraged up with debt that had inadequate risk premiums.
Now the virus will become a deflating cancer to the emasculated service based US economy and
unbalanced global economy, both of which are based on housing, finance, leveraged debt and yield chasing.
Globalization by definition destroys economic independence and fosters supply chain dependencies.
This will offer little decoupling from the consequences or deflationary fall out which we are about to witness.
Subprime to debt market to LBO to bonds... private SFR to commercial real estate, the fall out has just begun.
Best Buy has cut is FY08 guidance, citing soft consumer traffic.
Increased risk, costs and writedowns... UBS analyst Philip Finch:
The world's banks "remain at risk" from as much as $203 billion in additional writedowns, largely because the bond insurance crisis may worsen.
"Risks are rising and spreading and liquidity conditions are still far from normal."
Increased credit costs of 10 basis points would lower 2008 industry earnings to 5.9 from 10%.
Increased writedowns, profits decrease... Fox Pitt analyst David Trone estimates Q1 writedowns and
cut Q1 profit estimates for Goldman Sachs, the biggest securities firm by market value, and three of its largest competitors.
Goldman may report a $1.7 billion writedown from leveraged loans; Goldman had $42 billion of leveraged loans at the end of November.
Morgan Stanley will have to write down an additional $2.2 billion, while Lehman and Bear Stearns face $960 million and $820 million, respectively.
The analyst reduced his Q1 profit estimate for Goldman 51%; Morgan Stanley 18%; Lehman 28% & Bears Stearns 27%.
The Nattering One muses... Grandma, my those are long teeth you have...
The subprime contagion, defined as a sudden awareness of unjustified price levels, inadequate risk mitigation and rising risk premiums.
The contagion has spread from overpriced real estate to MBS to CDO to ABCP to LBO & stock buy back to monoline guarantors to the bond market and to the stock market.
In all cases the virus has attacked grossly overvalued assets which had been leveraged up with debt that had inadequate risk premiums.
Now the virus will become a deflating cancer to the emasculated service based US economy and
unbalanced global economy, both of which are based on housing, finance, leveraged debt and yield chasing.
Globalization by definition destroys economic independence and fosters supply chain dependencies.
This will offer little decoupling from the consequences or deflationary fall out which we are about to witness.
Subprime to debt market to LBO to bonds... private SFR to commercial real estate, the fall out has just begun.
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