#1 - Warning: Writedowns Ahead
Banks begin reporting earnings March 10th. Will they issue warnings of further write-downs this week ahead of earnings?
CNBC’s Charlie Gasparino joins the panel for this discussion. Following is a summary of his main points.
Citigroup
According to Goldman, Citigroup is the most vulnerable to subprime writedowns. Gasparino also thinks Citigroup remains a “huge mess” and should see other massive writedowns. Now the questions becomes - do they eliminate their dividend all together.
Goldman Sachs
Goldman dodged a bullet last quarter, but they most likely won't be so lucky this quarter, says Gasparino. They could be in the “soup” with Citigroup.
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Also, a consortium of banks has largely finalized a deal to recapitalize troubled bond insurer Ambac Financial Group and is now trying to sell the plan to the rating agencies to save Ambac's triple-A rating, CNBC has learned.
The review should be done by the end of the week, says Charlie Gasparino. But, I don’t think they’re great businesses going forward.