Reuters reports that Sanford C. Bernstein has slashed its earnings estimates on Goldman, Lehman and Morgan Stanley. Firm analyst Brad Hintz said in a note to clients this week: 'as long as these firms have these troubled assets on their balance sheets, their earnings results will be affected by the fluctuations in the fixed income market and the basis and roll risk of their hedging strategies'. The three firms also had their profit estimates cut by Bank of America earlier in the week.

Bloomberg reports that Morgan Stanley has said this week that the bear market in European stocks is likely to persist for the next 6 - 12 months. The firm's strategists wrote in a note issued a few days back that 'we are not bullish on the remainder of 2008 as we think the bear-market rally is over....We have a real-estate crisis, a credit crunch, an inflation problem, an oil crisis' (Apart from that, everything is looking really good!).

The Financial Times reports that Bank of America is to pay $1.86bn to increase its stake in China Construction Bank to almost 11% in a bid to increase its international earnings.

The Wall Street Journal reports that Citi is to shut its Citi Venture Capital unit, which was launched less than a year ago and was specialising in the US mid-market. Seven of the 8 staff have already left.

Bloomberg reports that Germany's IKB has posted a $1.6bn loss in the 9 months through December, following subprime lending losses. The news agency also reports that Lehman Brothers has filed a lawsuit in Tokyo against Marubeni Group, which it holds responsible for $336m in fraud losses the firm sustained at the hands of two former company employees.

Reuters reports that Man Group, the world's largest publicly-traded hedge fund, posted a 60% increase in annual profit Thursday. Net profit before tax for the year ended 31st March came in at $4.01bn.

The Financial Times reports that UBS is said to have told members of its former private banking team responsible for US clients not to travel to America, fearing that they may be interrogated by investigators looking into possible tax evasion issues which may involve the bank.

Finally, The Evening Standard's City Spy column says that things are so tight at Citi in London, that the firm is refusing to pay the 5p Marks & Spencer is charging for the plastic bags that Citi staff use to ferry back food to the office as they work long into the night. Shame on those staff that tried to claim the 5p in the first place!

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