January 6, 2012, 9:03 pm
Wall Street Is Bracing for Dismal 4th Quarter
By SUSANNE CRAIG
Wall Street banks have been buffeted by the weak American economy and the European debt crisis.
For most Wall Street bankers, 2011 was a year they would rather forget. Investors will soon find out just how bad that year was for the country’s biggest financial institutions.
In recent days, analysts have been lowering their fourth-quarter earnings estimates for Goldman Sachs, Morgan Stanley, Citigroup and Bank of America. Analysts are also bracing for lower earnings from JPMorgan Chase, which on Friday will be the first of the Wall Street banks to report results.
“It’s likely 2011 will be the worst year for revenue growth for the banks since 1938, and so far 2012 isn’t feeling much better,” said Michael Mayo, an analyst with Crédit Agricole Securities and the author of the recently published book “Exile on Wall Street: One Analyst’s Fight to Save the Big Banks from Themselves.” “The industry simply grew too fast over the past two decades and now it’s downshifting. This process will take time, but the hit to revenue is happening now.”
Wall Street banks have been buffeted by a weak economy in the United States and by concerns that the European debt crisis will spread, sending shock waves through the financial system.