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&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;&lt;?xml:namespace prefix=&quot;o&quot; ns=&quot;urn:schemas-microsoft-com:office:office&quot;?&gt;&lt;o:p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;This week, the fallout&amp;nbsp;as a result&amp;nbsp;the credit crisis continued, as&amp;nbsp;a&amp;nbsp;handful of the&amp;nbsp;largest investment banks announced significant staff cuts, billions of dollars in&amp;nbsp;subprime mortage-backed security write-downs, and&amp;nbsp;major management changes at the top.&lt;/span&gt;&lt;/p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;&lt;/span&gt;&amp;nbsp;&lt;/p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;JPMorgan, which is expected to book more than $2 billion in write-downs when it&amp;nbsp;reveals its latest quarterly results,&amp;nbsp;unveiled plans yesterday to reduce headcount in its fixed income division by as much as 10 percent.&amp;nbsp; Earlier in the week, Merrill Lynch announced its major write downs, in the amount of nearly $5 billion,&amp;nbsp;as well as&amp;nbsp;the ouster of&amp;nbsp;two top managers in its fixed income division.&amp;nbsp; UBS also let go two higher-ups in its fixed income unit,&amp;nbsp;not long after it announced $3.4 billion in losses.&amp;nbsp; And today, Citi, which took a hit of $6 billion dollars due to bad subprime loans, said it would be combining its underperforming investment banking division with its alternative investments unit, placing the units in the hands of former Morgan Stanley executive Vikram S. Pandit, who&#39;s only been with Citi for a few months.&amp;nbsp; Reporting on the reorganization, The New York Times also&amp;nbsp;noted that&amp;nbsp;Citi&#39;s stock was downgraded today from &quot;buy&quot; to &quot;sell&quot; by Deutsche Bank.&lt;/span&gt;&lt;/p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;&lt;/span&gt;&amp;nbsp;&lt;/p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;The good news amidst the bad news is while fixed income units are slimming down, equity units are fattening up.&amp;nbsp; Investment Dealers&amp;#8217; Digest ran a piece this week on Bank of America&#39;s recent additions to its equity capital markets staff.&amp;nbsp; According to one recruiter who spoke with &lt;em&gt;IDD&lt;/em&gt;, B of A might be &quot;taking advantage of the growing pool of available equity capital market professionals displaced by job cuts at firms looking to cut costs.&quot;&amp;nbsp; Another Wall Street recruiter told the magazine that &quot;targeted expansion in [equity capital markets] increasingly appears to be a strategy utilized by the large investment banks given the troubled states of the fixed-income market.&quot;&lt;/span&gt;&lt;/p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;&lt;/span&gt;&amp;nbsp;&lt;/p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;&lt;font face=&quot;Verdana&quot; color=&quot;#333333&quot;&gt;&lt;span style=&quot;FONT-SIZE: 8pt; COLOR: #333333; FONT-FAMILY: Verdana&quot;&gt;&lt;/span&gt;&lt;/font&gt;&lt;/span&gt;&amp;nbsp;&lt;/p&gt;&lt;p class=&quot;MsoNormal&quot; style=&quot;MARGIN: 0in 0in 0pt&quot;&gt;&lt;span style=&quot;FONT-SIZE: 10pt; FONT-FAMILY: Arial&quot;&gt;&lt;font face=&quot;Verdana&quot; color=&quot;#333333&quot;&gt;&lt;span style=&quot;FONT-SIZE: 8pt; COLOR: #333333; FONT-FAMILY: Verdana&quot;&gt;&lt;/span&gt;&lt;/font&gt;&lt;/span&gt;&amp;nbsp;&lt;/p&gt;&lt;/o:p&gt;&lt;/span&gt;

Derek Loosvelt

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The Library

Bad News Banks

This week, the fallout as a result the credit crisis continued, as a handful of the largest investment banks announced significant staff cuts, billions of dollars in subprime mortage-backed security write-downs, and major management changes at the top. JPMorgan, which is expected to book more than $2 billion in write-downs when it reveals its latest quarterly results, unveiled plans yesterday to reduce headcount in its fixed income division by as much as 10 percent.

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