Whitney Sends Bank Stocks Tumbling

It seems that one of the most influential analysts in the current market conditions is Meredith Whitney from Oppenheimer. Yesterday she slashed her estimates for Citigroup [[c]] saying it could suffer write-downs totaling $13.2 billion, sending its stocks down, and today she sent Merrill Lynch [[mer]] and UBS [[ubs]] stocks plunging by saying that they could suffer a loss this quarter and have massive write-downs of $6 billion and $11.1 billion, respectively.

The fact that oil prices have risen above $107 a barrel and the lower-than-expected results from Oracle [[orcl]] haven’t given the stock markets much cheer either. In these market conditions, it seems an analyst’s best bet is to look at worst-case scenarios as many of those are coming true. All of this will be great news for those who, like Jim Rogers, were short financials and long commodities.

On a different note, the Clear Channel deal may not be dead after all. Clear Channel Communications [[ccu]], the US radio operator, said on Thursday it had won a ruling from a Texas judge that may advance its efforts to force banks to finance a $20 billion buyout by private equity firms Bain Capital Partners and Thomas H Lee Partners who filed the lawsuit. A group of six banks, led by Citigroup was supposed lend more than $22 billion for the buyout, but apparently backed out after credit conditions worsened. Clear Channel shares rose today, erasing its part of its loss of 17.5% on Wednesday.

Posted in Categories: Stocks, USA.

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