Effects of prolonged sub-prime crisis hit the financial sector profits were.

Those hoping to swallow the bitter fruit of going after the subprime mortgage finance companies found that effects of the subprime mortgage duration of follow-up longer than expected, their bond is still not cheap enough to buy level. .<P Style=MARGIN: 0px> </ P> <P style=MARGIN: 0px> Fifth Third Asset Management portfolio manager Mirko Mikelic said the housing market downturn and rising energy prices could force sharp slowdown in consumer spending. .He continued, "then you will see more writedowns, raise the threshold for loans to people who have stopped using home equity loans, from credit card use instead." </ P> <P style=MARGIN: 0px> </ P .> <P style=MARGIN: 0px> Moody's also said that financial firms underestimated the loss of residential mortgage debt. .MBIA and Ambac Financial, including bond insurers, including the deteriorating secondary mortgage loans have a "significant risk exposure." .This means that these bond insurers might be the highest threat rating, profitability may be further hit. .</ P> <P style=MARGIN: 0px> </ P> <P style=MARGIN: 0px align=center> underestimated sub-prime mortgages </ P> <P> (http://finance.) Recognized the market last year .view is that companies such as Citigroup and Merrill Lynch in the new senior leadership, will make the greatest extent in 2007, announced writedowns and losses, and move on. .But this has not happened. .Bank, and MBIA and other bond insurers American International Group's performance, the situation is deteriorating and may continue into the second quarter and beyond. .Therefore, investors are avoiding these companies mostly in bonds and stocks. .</ P> <P> "that we suffered a little setback, is now ready to fast forward once again is not in the truth of." CreditSights analyst David Hendler research firm said, "This is a long-standing problem will not improve next quarter, .probably will not improve next year. "</ P> <P> Merrill Lynch data show that during the financial stocks fell nearly 11% so far, the worst performing stocks for the same period, the S & P 500 Index over the same period fell 3.7 percent. .Bond banks and brokerages so far this year have declined 3%, while corporate bonds with high ratings overall increase of 0.3%. .Financial companies still underestimate the face of the mortgage loan losses, which make it less than expected earnings announcement. .At the same time, also the main source of revenue dried up. .</ P> <P align=center> under pressure from financial companies </ P> <P> a series of actions the Fed injected into the banking system after the systemic collapse of financial markets eased concerns. .However, when the reporting season for each of aftershocks suggests that plagued the global market since last year's credit crisis may be entering a new phase, this phase of the current reflects the decline in U.S. consumer debt market. .</ P> <P> "will pressure financial firms, which are derived from derivatives." Credit analyst at Deutsche Bank, said John Tierney, "priority residential mortgages and consumer debt portfolio may be the next fall of .the field. "</ P> <P> deterioration in the subprime mortgage situation in the field of auto loans, credit cards and home equity loans to spread the field, all of which have been packaged into bonds held by banks and other derivatives. .</ P> <P> This will make U.S. banks and other financial companies to meet earnings forecasts more difficult. .Pricing errors of the impact of mortgage assets to be more persistent than expected, due to banks and rating agencies were wrong assessment of the value of mortgage bonds. .In the last several years, subprime mortgages led to Wall Street bond sale and the subsequent loss of 400 billion U.S. dollars at least, the consumer debt has cracks. .</ P> <P> due to huge potential losses, which analysts say should avoid the occasion of all financial assets, Pacific Investment Management Company (PIMCO) and some large investors said financial bonds are cheap, PIMCO released in May .a report that the company recently increased its investment in bank credit in the world. .</ P>.