The two firms that arguably fared the best though the credit crunch--Goldman Sachs and JPMorgan Chase--might run into a bit of turbulence in this quarter. Some big name analysts have been slashing their Goldman Sachs estimates, as we've noted. Richard Bove says it's time to sell. JPMorgan Chase disclosed it has already taken a $1.5 billion hit on its mortgage assets since July, due to "substantially deteriorated" trading conditions. Portfolio worries that the effect on other firms not nearly as well poised to weather the continuing storm will be even worse. My guess is that writeoffs will be worse than previously expected. One thing to keep an eye on is non-subprime assets. Alt-A assets may be poised to stagger, and commercial mortgage-backed securities may wobble a bit, as well. On top of that, there may be a lot less in offsetting profits from core business lines, like investment banking. You can feel the third-quarter earnings jitters rising already.

For more:
- here's the Portfolio article

Related Articles:
Bank earnings are going to be ugly
Earnings and the Wall Street pecking order
Second-quarter earnings still a question mark