Wall Street braces for more bad news
TEXT OF STORY
Scott Jagow: I wish bank CEOs and treasury secretaries and mortgage lenders would stop trying to reassure us. Because every time they do, things seem to get a whole lot worse.
The mortgage companies Fannie Mae and Freddie Mac are in so much trouble, the White House is considering a government takeover. That’s according to the New York Times. And after some promises, promises, the banks are about to unload more bad news on us. Bob Moon explains.
Bob Moon: Financial stocks got a lift this week when JP Morgan chief Jamie Dimon spoke of better days to come. But the euphoria didn’t last. Wall Street’s bracing for a new round of bad news when banks report their latest profits starting next week.
Seaport Securities stock broker Ted Weisberg says investors have heard it all before — hopeful talk followed by deeper losses.
Ted Weisberg: People are skeptical, and they just are not accepting the verbiage. Talk is cheap — we need to see substance.
There was a hint of some actual improvement late yesterday. The Fed revealed investment banks didn’t borrow from its emergency lending program over the past week, and commercial banks scaled back. But Weisberg says it’ll take a lot more than one hopeful report:
Weisberg: I think what everybody would like to see is just some clarity. Where is the light at the end of the tunnel? And, is the light at the end of the tunnel truly light, or is it a freight train coming at us?
He says investors fear the unknown, but they’ll be able to focus on real results over the next few weeks:
Weisberg: Everybody’s going to be taking a good, hard look.
In Los Angeles, I’m Bob Moon for Marketplace.
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