April 16 (Bloomberg) -- Jamie Dimon, Richard Fuld, Lloyd Blankfein, and John Mack say that the credit-market contraction is winding down. Investors whose bank stocks plummeted aren't convinced.

Dimon, chief executive officer of JPMorgan Chase & Co., said today that the credit crisis is ``maybe 75 percent to 80 percent'' over. Fuld, CEO of Lehman Brothers Holdings Inc., told shareholders yesterday that the ``the worst is behind us.'' Their comments followed similar remarks last week by Goldman Sachs Group Inc.'s CEO Blankfein who told investors ``we're closer to the end than the beginning,'' and Mack, Morgan Stanley's chief, who said the crisis will probably last ``a couple of quarters'' longer.

It's not the first time that banking executives expressed optimism that turmoil in the credit markets was contained or approaching an end. And they were wrong. Total writedowns were about $97 billion at the end of December and surged to $181 billion by the end of February. The world's biggest banks have recorded $255 billion in asset writedowns and credit losses since the beginning of 2007.

Shareholders need ``more proof before they start believing things are fine again,'' said Rose Grant, managing director of Eastern Investment Advisors, the money-management unit of Boston- based Eastern Bank, which owns Merrill Lynch & Co. shares. Until the firms disclose the full extent of their writedowns and credit losses ``people are going to sit on the sidelines.''

Dimon Optimistic

Investors get a closer look at the magnitude of the industry's woes this week. JPMorgan, the third-biggest U.S. bank by assets, said today that first-quarter profit fell 50 percent after $5.1 billion of writedowns and provisions linked to bad home equity loans, financing for leveraged buyouts and subprime mortgages. Net income dropped to $2.37 billion, or 68 cents a share, matching estimates.

Merrill, the world's biggest brokerage, reports results tomorrow, followed by Citigroup Inc., the largest U.S. bank, on Friday. All the firms are based in New York.

Dimon told analysts and investors today on a conference call that the credit-market crisis is more than halfway over and may be as much as 80 percent over. ``That side is working itself out,'' he said. ``That doesn't mean the recession won't get worse or better.''

Paul Calello, CEO of the investment bank at Zurich-based Credit Suisse Group, cautioned in a speech today that the credit crisis isn't over yet.

Double-Header

``In terms of asset writedowns, I don't believe we are at the end,'' Calello told a meeting of the International Swaps & Derivatives Association in Vienna. ``In terms of specific asset deterioration, we are not necessarily finished.''

The International Monetary Fund said last week that losses stemming from the U.S. subprime mortgage crisis may reach $945 billion. The fund also predicted as much as $90 billion in further losses from potential downgrades of bond insurance companies. The group estimates that more than $500 billion of the losses will be related to banks.

The collapse of the subprime market in the U.S. has reached its eighth inning or ``maybe top of the ninth,'' Mack said on April 8, referring to the final period of a baseball game. Europe is in the sixth inning and the market for commercial mortgage securities is ``probably in the fifth,'' he said.

``If we are in the ninth inning, it's a double-header,'' Sanford C. Bernstein's Brad Hintz, the third-ranked securities analyst according Institutional Investor magazine, said in a Bloomberg television interview yesterday. ``It's going to take time for the market to settle down after this.''

Earlier Comments

The optimistic comments by Fuld, Blankfein and Mack echoed those made by Wall Street executives in June 2007.

Christopher O'Meara, former chief financial officer of Lehman, told investors that ``we continue to believe that subprime market challenges are and will continue to be reasonably contained.'' Bear Stearns Cos. CFO Sam Molinaro said at the time that while declining value of subprime bonds was ``a challenge'' for the firm, ``it hasn't spilled into other areas of the market.''

``Subprime continues to be weak'' and yet ``there's very little effect on other credit markets,'' David Viniar, the CFO of Goldman, told reporters on a conference call at the time.

Stan O'Neal, Merrill's former chairman and chief executive officer, said that subprime defaults were ``reasonably well contained.'' Bank of America Corp. CEO Kenneth Lewis said June 20 that the housing slump was just about over. ``We're seeing the worst of it,'' he said.

Bear Trigger

Bear Stearns helped trigger the credit contraction after two of its hedge funds, which invested in securities linked to subprime mortgages, collapsed in July. The company's fourth- quarter loss of $854 million was the first in its 85-year history.

Bear Stearns, once the fifth-biggest U.S. securities firm, was forced to submit to an acquisition by JPMorgan on March 16 after customers and lenders fled because of speculation that the company faced a cash shortage.

Bear Stearns has fallen 92 percent since late July, while Goldman Sachs dropped 14 percent and Lehman plunged 36 percent. Morgan Stanley declined 30 percent. JPMorgan has risen less than 1 percent.

JPMorgan increased $2.84 to $44.96 at 4:15 p.m. in New York Stock Exchange composite trading. Bear Stearns rose 18 cents to $10.16, Goldman Sachs climbed $4.85 to $169.05, Lehman advanced $2.05 to $41.72 and Morgan Stanley rose $1.90 to $45.42. Bank of America increased $1.40 to $36.98.

Credibility `Lacking'

Lehman, the fourth-largest U.S. securities firm, said last week it had to bail out five short-term debt funds last quarter that were crippled by frozen credit markets. Earlier this month Lehman raised $4 billion from a stock sale, seeking to quell concern the firm was low on capital.

Fuld said yesterday that the sale was intended to strengthen capital and send a message to investors.

``The credibility of some of these people that are making these quotes is pretty lacking,'' said Jon Fisher, a Minneapolis- based portfolio manager at Fifth Third Asset Management which oversees $22 billion in assets including JPMorgan shares. ``I don't pay any attention to them. They don't have any credibility to be calling a bottom here.''

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net

Last Updated: April 16, 2008 16:25 EDT