There Go the Banks

We are facing one of two futures: global economic collapse or a world war. Since war would keep the politicians in power who have led us to this point, the latter option seems to be more likely. It is probable that the economic collapse may precede the war and the warning signs are easily seen if you look.

MF Global was the first major sign as it foreshadows the seizure of personal property and the probability of a banking holiday. The size of American banks’ exposure to the collapse of the European Union is staggering: Bank of America alone is $70 trillion minimum. When the banks go down, the economy collapses. If you have money in a bank account, ask yourself how much interest it is generating and deduct the tax liability? Then ask yourself if it is worth losing that money due to a technicality (MF Global) or a reevaluation of the greenback after a bank holiday.

David DeGerolamo

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UBS, Goldman, Morgan Stanley Earnings Estimates Cut By JPMorgan Cazenove

Jan 6, 2012

JPMorgan Cazenove analysts cut their earnings outlook for investment banks for 2011, 2012 and 2013, citing worsening conditions in fixed income and equities.

UBS AG (UBSN) had its 2011 earnings-per-share estimate trimmed by 4 percent and the 2012 estimate by 11 percent, JPMorgan analysts including Kian Abouhossein said in a note to clients today. JPMorgan also curbed its Goldman Sachs Group Inc. (GS) forecast for 2011 by 37 percent and the 2012 figure by 19 percent.

The earnings downgrades of banks including Goldman and UBS “reflect weaker investment banking client activity and lower volumes across the board than previously anticipated,” JPMorgan’s analysts said. “Consensus needs to come down to reflect the weaker-than-expected environment” in 2011’s fourth quarter, they said.

JPMorgan also cut forecasts for other banks including Morgan Stanley (MS), whose estimates were reduced by 5 percent for 2011 and 17 percent for 2012.

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