JPMorgan, Wells Fargo, Bank America Face Ratings Cuts

[Joanne98]

March 5 (Bloomberg) -- JPMorgan Chase & Co., Wells Fargo & Co. and Bank of America Corp., the three largest U.S. banks by market value, may face credit-rating downgrades by Moody’s Investors Service amid signs they’ll set aside additional cash for loan losses.

JPMorgan, the largest U.S. bank by market value, had its ratings outlook cut by Moody’s to negative from stable. Moody’s said it will review the long-term debt ratings of Wells Fargo, the second-largest U.S. bank, and Bank of America, ranked third, on concern that higher credit costs may damage capital ratios.

The U.S. economy “deteriorated further” in almost all corners of the nation in the past two months as consumer spending slumped and manufacturing declined, the Federal Reserve said in its regional business survey this week. Ten of 12 Fed district banks reported worsening conditions in their regional economies and respondents didn’t expect a “significant pickup” until late 2009 or early 2010.

“This is pulling them in line with their peers,” Jeffery Harte, a banking analyst at Sandler O’Neill & Partners LP in Chicago, said of Moody’s new outlook on New York-based JPMorgan.

JPMorgan’s profit fell 76 percent in the fourth quarter as rising defaults and the U.S. recession forced the bank to write down $2.9 billion of assets and boost reserves for bad loans. The bank’s market value of $72.5 billion is more than Wells Fargo, Bank of America and Citigroup Inc. combined. New York-based Citigroup is the fourth-largest U.S. bank by market value.

Capital Levels

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6uoK5iuRftY&refer=home

Assholes!

[MercutioATC]

1. It's important because it affects the rates they pay to borrow money, but

does anybody really trust anything the rating agencies say any more?