Banks have seen a hectic couple of days' of trading, thanks to a bevy of news. I thought it may be good to take a look at some earnings results from a few of the banks, and what it could mean for the economy going forward.

First, let's look at the earnings:

• JPMorgan Chase (JPM): earnings of 74 cents per share; expectations for 60 cents per share
• Citigroup (C): a loss of six cents per share; expectations for a loss of 33 cents per share
• Goldman Sachs (GS): earnings of $8.20 per share; expectations for earnings of $5.20

For more earnings forecasts, see Peter Cohan's Earnings expectations for 10 banks tell a mixed story.

Thomson Financial expects U.S. Bancorp (NYSE: USB) to earn $0.59 when it announces its fourth-quarter earnings on January 15th. That's 11% below the same period in 2006, when it earned $0.66.

U.S. Bancorp is a Minneapolis, MN-based bank operating in four lines of business: Wholesale Banking, Payment Services, Wealth Management and Consumer Banking. In the last year its revenues were $13 billion and its net income totaled $4.5 billion. Its stock has lost 15.8% of its value in the last year and it trades at a P/E of 11.7.

It has a mixed track record of delivering actual earnings vs expected ones. In the second quarter of 2007, it fell 3% below expectations and in the third quarter it beat by 1.5%. My hunch is that it will miss by a little.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in U.S. Bancorp securities.

Earlier in the week I talked about action some money market funds were having to take to protect their value and avoid having to "break the buck" thanks to the problems in the mortgage market. The Wall Street Journal reports today that the number of money market funds admitting to trouble is increasing {subscription required]. Today's story focuses on FAF Advisors, a unit of U.S. Bancorp (NYSE: USB) , which operates the First American Prime Obligations Fund. This fund posted a notice on its website that alerts its investors to the fact that the fund "entered into an agreement that provides that if a loss is realized on the notes issued by Cheyne Finance LLC, an affiliate of FAF Advisors will contribute capital to the fund, up to the amount of the loss, in an amount necessary to preserve the fund's price at $1.00 per share and to preserve the fund's AAA rating."

Cheyne Finance LLC is an SIV that went into receivership, so that's the one most are focusing on publicly, but as I've discussed before many money market funds hold assets from other SIVs in trouble. Five other fund groups that have moved to protect their funds or developed a plan under agreement with the SEC include Bank of America's (NYSE: BAC) Columbia Management Group, Credit Suisse Asset Management,. Wachovia's (NYSE: WB) Evergreen Investments, SEI Investments Co. and STI Classic Funds. Other funds that held Cheyne-related assets in recent SEC filings include Valic II Company fund, offered by a unit of American International Group, and RiverSource Cash Management fund.

U.S. stocks were slightly higher on light trading volume. The Dow was up 0.45%, the NASDAQ 100 up 0.35%, the S&P 500 up 0.35%, while 10-year bond rates decreased to 4.6030%. The CBOE VIX was up .02 to 11.38.

• Telik Inc's (NASDAQ: TELK) January option implied volatility collapsed after disappointing data. Telik was recently down $11.47 to $4.79. TELK Phase 3 trails related to its cancer drug Telcyta (treatment for non-small cell lung cancer & ovarian cancer) "did not achieve statistically significant improvement in overall survival." JANY & STFL downgraded Telik to sell. Telik's January option implied volatility was at 85, according to Track Data, below a level of 215 from last week, suggesting decreasing risk.
  

• Eli Lilly's (NYSE: LLY) January 55 calls were active on 6,163 contracts as Lilly rallies. Eli Lilly recently rallied .43 to $51.77, after a Court of Appeals for the Federal Circuit in Washington, D.C. ruled its 2011 Zyprexa patent was valid. Lilly faced pressure last week on documents leaked to the NY Times indicating Zryprexa (schizophrenia treatment) had understated weight gain and diabetes risk. Lilly's Zyprexa accounts for approximately 25% of Lilly's sales & 50% of its EPS. Lilly's January option implied volatility of 19 was near its 26-week average of 19, according to Track Data, suggesting non-directional risks.
  

• U.S. Bancorp's (NYSE: USB) calls active on company going ex-dividend on 12/27/06. USB goes ex-dividend on 12/27/06, paying a dividend of .40 cents. USB total intra-day call option volume was heavy on over 962,946 contracts, according to Track Data. Heavy call volume was attributable to traders hoping to take advantage of option exercises, call pricing discrepancies and low option transaction commission fees.
  

Liquid stocks with option implied volatility above 90, according to Track Data: AtheroGenics (NASDAQ: AGIX), Momenta Pharmaceuticals (NASDAQ: MNTA), Dendreon Corp (NASDAQ: DNDN), Escala Group (NASDAQ: ESCL), and Northfield Laboratories (NASDAQ: NFLD).

Option volume leaders today were Telik Inc, Altria Group (NYSE: MO), Clear Channel Communications (NYSE: CCU), and Apple Computer (NASDAQ: AAPL).

Options analysis provided by Paul Foster, options strategist for Theflyonthewall.com.