Citigroup and UBS may not be the only banks breaking bad news to investors this month.The ones who will really get hurt by these results are the employees of these firms. I predict you will see layoffs at all these firms as they try to turn their financial results around. The workers who didn't create the problem will need to pay the price for the executive who knowingly created loans that they knew could not be paid back. As usual those who suffer most are those that deserve it least.
Analysts warn that other retail banks that report quarterly earnings in October, including JPMorgan Chase and Washington Mutual, could suffer similar pains.
Before Monday's opening bell, Citigroup warned that its third-quarter earnings could fall 60 percent because of its exposure to subprime-backed mortgage securities.
That announcement came just hours after Swiss-banking giant UBS said it would take a take a writedown of $3.4 billion and post a loss in the third quarter because of subprime-related losses.
Monday, October 01, 2007
More Banks Could Join The Red-Flag Parade
After warnings by Citi and UBS, JPMorgan and others could follow with bad news of their own, though retail banking could lessen the pain.