Writedowns continue to pose an ongoing threat to the relative stability of the financial sector. From regional banks to major financial institutions, firms are owning up to significant losses and are doing everything in the process to limit the severity of the crisis. A crisis, I might add, that doesn’t seem to go away. Regulators meanwhile, including various standard-setting bodies, are focusing on further developing the necessary tools and methodologies with the purpose to closely and better monitor and better assess (if that’s possible) the financial sector by conducting and designing appropriate policy responses. Certainly, there have been, relatively speaking, some positive results in terms of crisis-containment. However, that hasn’t stopped the fact that more writtedowns are projected ahead.
According to Reuters, Patrick Pinschmidt, an analyst at Morgan Stanley is projecting that Lehman Brothers Holdings Inc. (LEH), could post a loss of $3.5 billion in the 3Q’08 on likely pre-tax writedowns, while Goldman Sachs Group Inc. (GS), may sustain $1.5 billion in writedowns. Subsequently, Pinschmidt, cut his third-quarter earnings outlook on Goldman to $1.65 a share from $3. Pinschmidt did also forecast a third-quarter loss of $2.80 a share for Lehman against a projected earlier profit of $0.08 cents a share.
Reuters, on the other hand is projecting earnings of $2.62 a share for Goldman, while Lehman is seen posting a loss of $1.89 a share for 3Q’08.
As we can see from projections out of different financial services – Wall Street still remains skeptical of the financial sector ahead of yet another tough quarter for U.S. investment banks. A sector which continues to be marked by additional writedowns amid a constantly weak operating environment.
Risk Our Money Not Yours | Get 50% Off Any Account
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!
Leave a Reply