Who's The Next Bear Stearns? at FinGad.com

Vote

Categorie: Equities
Submitted 8 months ago by

Ziad , President & CEO at Blackhawk Partners, Inc

The failure of Bear Stearns has raised questions about the health of other major banks and securities firms. While it’s unlikely that another major player will go under, I believe that several, including Citigroup and Merrill Lynch, remain in fragile condition. Here’s a brief prognosis for a few of the biggest financial institutions, from most vulnerable to least. Citigroup: The nation’s largest bank has recently seen its share price drop below book value ($22.74 as of Dec. 31), a sign that investors see more losses ahead. Merrill Lynch analysts say that charge-offs on loans and investments for the first quarter could cost Citi $18 billion, leading to a loss for the period.Oppenheimer bank analyst Meredith Whitney estimates Citigroup will have to boost reserves by more than $24 billion this year and again next year to cover credit losses. That total easily exceeds last year’s $17.4 billion and $6.7 billion in 2006. Not everyone has given up on Citi. I believe we are in the midst of a panic that is similar to the panic that existed in the early '90s…..BUT you won't find a single human being on the planet to say anything positive about Citigroup, which is why you may want to own it.Merrill Lynch: I think Merrill is "the riskiest” of the large investment banks. It is weighed down with $30.4 billion in subprime collateralized debt obligation... More...

[ 2 Comments | Send To A Friend | Bookmark Review ]

2 comments ↓

#1 | Narasimhan @ 8 months ago Owner at Krish Systems User Rank : 1905 Portfoilo Balance: $498,940.00 Comment Rating: 0 Flag Comment Spam | Miscategorized | Prohibited: A skewed asset allocation by every one in the economy, read housing loans, is leading a very painful correction.
#2 | Vtcastle @ 8 months ago User Rank : 532 Portfoilo Balance: $12,365.00 Comment Rating: 0 Flag Comment Spam | Miscategorized | Prohibited: Another stellar report Ziad. Couldn't agree w/ you more on Merrill and Goldman. I've had a short on Merrill for some time, and will hold it in place until the next earnings report. My trading pals have suggested as much as 4 to 12 billion in write downs, but any write down (in my opinion) will be a negative for Merrill. Hope you got in on Goldman when it hit the 140s! GS is definitely best in breed of the financial sector, and I'm hoping they will lead the financials out of the doldrums. Are you a believer that the market has bottomed? I would be interested in your prognostications.

Please Login or Register to comment