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Wall Street Breakfast: Must-Know News

Posted on June 18, 2008

Credit crunch, take two. Goldman Sachs analysts warned there is more financial market turmoil ahead. Act-II of the credit crisis will be lead by consumer-debt losses and writedowns, forcing banks to raise another $65B at high costs. Looking at past credit cycles, it says four hurdles must be cleared before a recovery: 1) Credit costs stabilize. 2) Banks complete their recapitalization. 3) Consensus estimates narrow to a more realistic range. 4) The yield curve steepens. Bank stocks and ETFs took a beating Tuesday: ZION -10.2%. STI -8.8%. WM -7.85%. WB -5.35%. RKH -3.3%. KBE -3.5%. Goldman s...

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