Oppenheimer Estimates U.S. Credit Crisis To Extend Beyond 2009

Washington, D.C. (AHN) - The U.S. credit credit crisis will extend through 2009 with banks writing off over $170 billion, Oppenheimer and Company said.

The credit crisis will continue to expand, spreading from finance companies to U.S. consumers, Meredith Whitney, an analyst at Oppenheimer, said in a research note.

Oppenheimer projects bank earnings will fall by $88 billion this year and $96 billion in 2009. Bank of America, Citigroup, JPMorgan Chase, Wachovia Corporation and Wells Fargo and Company are among the banks the analyst group expects will cut earnings by 20 percent in 2009.

Meanwhile, the Conference Board said despite soaring food and gas prices and weak employment rates, there is still a possibility the U.S. could avoid a recession. Ken Goldstein, labor economist of the Conference Board, said economic data point to a weak economy, but not one in recession.