Banking analyst starts U.S. banks with "Underperform" (Corporate Profits, how much)

[delusianne]

[Veteran banking analyst Mike] Mayo expects the sector's loan losses to increase from 2
percent to 3.5 percent by the end of 2010 given on-going
problems with mortgages and accelerating problems in other
areas, while earnings will continue to come under pressure.

"While mortgage losses may be half way to the peak,
(credit) card and consumer losses may only be about one-third
of the way and industrial and commercial real estate problems
(except construction) seem in the early stages," said the
report.

"Loan losses, as a percentage of loans, will likely pass
the level of the Great Depression," Mayo said.

UPDATE 1-CLSA's Mayo starts U.S. banks with underperform | Markets | US Markets | Reuters

[ViewFromThePeak]

Originally Posted by delusianne

[Veteran banking analyst Mike] Mayo expects the sector's loan losses to increase from 2
percent to 3.5 percent by the end of 2010 given on-going
problems with mortgages and accelerating problems in other
areas, while earnings will continue to come under pressure.

"While mortgage losses may be half way to the peak,
(credit) card and consumer losses may only be about one-third
of the way and industrial and commercial real estate problems
(except construction) seem in the early stages," said the
report.

"Loan losses, as a percentage of loans, will likely pass
the level of the Great Depression," Mayo said.

UPDATE 1-CLSA's Mayo starts U.S. banks with underperform | Markets | US Markets | Reuters

He could end up on a no-fly list or a "candidate" for FEMA camp beta testing for such unpatriotic comments.

[delusianne]

MARKET SNAPSHOT: Analysts Ask Whether Guidance Is Low Enough To Support Bulls (http://money.cnn.com/news/newsfeeds/articles/djf500/200904061629DOWJONESDJONLINE000486_FORTUNE5.htm - broken link)

"The market is going to need some degree of confidence that better economic activity is also leading to a stabilization of corporate profits. It always comes down to the guidance and the extent that companies, specifically financials, can offer guidance that the market believes in," said Dean Curnutt, president of Macro Risk Advisors.
***
"We have been looking for things to get 'less bad' -- however, our reading of the recent data does not yet support that view, although stock investors have taken it to heart that the bottom is now in and the only decision left is not to buy, but how much. The markets will get another test this week, as expectedly poor earnings will be reported. Maybe they'll be 'less bad,' too," said Paul Nolte, director of investments, Hinsdale Associates.

Well...I posted a thread about Cramer being bullish... that was the early warning signal!