Merrill's Bernstein Says Credit Crisis far From Over

In a note to his clients, Merrill Lynch's Richard Bernstein warned that the credit crisis is far from over and that financial companies have more hits to take. He writes:

``Investors are significantly underestimating both the scope and the extent of the credit bubble and the consequences of its subsequent deflation...The problems are not confined to large institutions that are overexposed to U.S. subprime loans.''

It may be true that markets are undersestimating the scope although I think it's been made pretty clear tfoor awhile that the financial industry is a mess. Many large and small banks and investment banks will feel significant pain over the next couple of years as their model of doing business changes.

It's nice to see the highly paid gurus on Wall Street are finally waking up to this realization.