CNN is running an article with the headline “More Bad News From The Banks” which informs us that more banks are warning of bigger than expected writedowns which may result in disappointing quarterly results.
Among the first to issue a warning was Bank of America CEO Kenneth Lewis, who said that the company now expected to report bigger-than-expected writedowns in the fourth quarter.
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“You certainly can assume results will be disappointing,” he said. “But we do expect to be profitable in the fourth quarter.”
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Crosstown rival Wachovia (Charts, Fortune 500) followed suit, warning in an SEC filing that the value of its loan-backed securities lost $1.34 billion in value during the month of October and November, roughly equal to what the Charlotte-based bank reported when it delivered its third-quarter results in October.
Now that this news has been let out of the closet, the financial situation of these distressed banks should turn around next quarter. All major losses related to bad mortgages have been written off and accounted for, right?
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