How bad will it be?

Meredith Whitney, storied bank analyst at Oppenheimer, has some bad news for equity investors who bet that the worst was over. According to Times Online, she's telling clients that big bank stocks could fall by another 50 percent, with the worst hit to be Merrill Lynch, Citigroup and UBS. Earnings news is now trickling out (Bear Stearns of course canceled its report). But the coming writedowns combined with the heightened fear makes for falling stock prices. Keep your eyes on CDS spreads as well. The costs of protecting against a Lehman Brothers default is at scary, Bear Stearns-like levels. Any real earnings surprises could lead to another round of rumors. And we know how those can really devastate a firm. 

For more:
- here's the article from Times Online

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