Banking, finance, and taxes
Citigroup (C) Warning: Banks In Trouble Into 2009
Published:
Citigroup (C) came clean about what everyone with any sense already expected. Write-offs at the money center bank are not over.
According to The Wall Street Journal, the "bank will see a fresh round of write-downs from failing mortgage investments in the bank’s second-quarter results, and said credit costs from souring consumer loans "may continue to rise throughout the year."
After bottoming in March, a number of bank and brokerage stocks recovered as much as 20% into April and May. Several large financial company CEOs said that the worst of the crisis had passed.
The grim reality of the long-term situation has set in with raising mortgage defaults and a troubled consumer credit market. As bad news came out of UBS (UBS), Bank of America (BAC), Lehman (LEH), and AIG (AIG), stocks in the sector started to sell off and a number have hit new 52-week lows.
None of these stock will recover during 2008, and some may not move up for over a year. Wall St. doesn’t like all of the new surprises.
Douglas A. McIntyre
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