Busy bee: Meredith Whitney dissed Citigroup's recovery plan yesterday and last night she lowered Goldman's, Lehman's, Morgan Stanley's and Merrill's earnings estimates

That Meredith Whitney is a busy busy bee.  Yesterday, Oppenheimer's financial stock soothsayer rained on Vikram Pandit's plan to put Citi back on the road to recovery where she said that the plan sounded all too much like one Chuck Prince had floated before.  She was interviewed by Bloomberg TV;  you can find the video here -- look for the link on the right that says "Whitney Says Pandit Faces `Impossible Feat' at Citigroup" under 'related video and graphics'....

Then last night Meredith continued to be busy, putting out a 20 page tome entitled: "What Goes Up, Must Come Down: FASB 159 Write-Ups Come Back To Bite 2Q08 Earnings".  She lowered her estimates for Goldman Sachs, Lehman Brothers, Morgan Stanley, and Merrill Lynch....

Ms. Whitney said:

Above the radar screen last quarter were sizable writedowns from leverage lending exposures as well as the continued bleed from US mortgage related writedowns.   Below the radar screen were write ups from the valuation write ups resulting from spread widening on the firms’ debts. For example, Merrill Lynch reported a gain of $2.1 billion on the fair value of company debt due to its own credit spreads widening in 1Q08, the largest gain out of the brokers group.   In 1Q08, Lehman Brothers reported a gain of $600 million, Morgan Stanley reported a gain of $537 million, and Goldman Sachs reported a gain of $300 million.   Based upon the action in CDS spreads so far this quarter, we believe the brokers earnings will face sizable headwinds from the reversal of revenues resulting from the spread narrowing of firms’ CDS spreads.

As a result of such “reversal of fortune”, we are cutting our 2Q08, FY2008, and FY2009 estimates on the brokers by an average of 41%, 48% and 20% respectively, based on our outlook on the capital markets as well as sizable estimated revenue reversals from FASB 159.

Then she took down her 2nd Q and full year 08 earnings estimates, as well as '09.  Here are her Q2 and full year:

Goldman went from $4.09 to $3.48 for Q2.  Full year went from $17.35 to $14.65.
Lehman Brothers went from  $1.10 to $0.72 for Q2.  Full year went from $4.43 to $3.45.
Morgan Stanley went from $1.44 to 0.94 for Q2.  Full year went from $5.85 to $5.00
Merrill Lynch went from $1.00 to $0.20 for Q2.  Full year went from $1.15 to a loss of $0.45