HEY!! Finally, these two companies are telling the truth. Maybe there is hope after all. We will see if this new-found honesty holds when Wells reports its earnings scheduled for Wed, prior to the opening of the US market. Banks telling the truth about their holdings and their value (transparency) is the only shot at reviving the credit markets. -Best, Mr Mortgage
Goldman Sachs and Wells Fargo Warn "DELUSIONAL" Investors on Stock By Ambrose Evans-Pritchard, International Business Editor - Last Updated 1:158am BST 15/04/2008
Wall Street faces the growing risk of an equities bloodbath in coming months as the credit crunch spreads to the wider economy and earnings crumble, according to a pair of grim reports issued by Goldman Sachs and Wells Fargo.
David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.
"Although only a few firms have reported first quarter results, early signs are awful. We expect a swath of lowered profit guidance," he said in a research note published today, entitled 'Fasten Seatbelts'.
Mr Kostin, who replaced the ever-bullish Abby Cohen as chief strategist in December, expects the S&P index to reach 1,160, which would amount to a fall of 27pc from the bull market peak of 1,576 in September and enter the annals as a relatively severe bear market.