HSBC Holdings: End of the Charade

``HSBC has not made the necessary adjustments during the quantitative easing reprieve. Rather, it has allowedlegacy problems to linger as new ones in emerging markets gather pace. The result has been extreme earnings overstatement, causing HSBC to become one of the largest practitioners ofcapital forbearance globally. This charade appears to be ending, given how few earnings levers remain besides selling off core elements of the franchise and the stringencies of Basel III compliance. We expect EPS pressures and dilution from capital increases to be high. Adividend cut may even be on the cards. SELL.''