If anyone is in any doubt that the US economy is in trouble, then they should take a long hard look at today's results from Bank of America. It is sorry story of defaults, write-downs and poor investments.

Bloomberg - Bank of America Corp., the second- largest U.S. bank, said profit declined 32 percent in the third quarter after trading losses, defaults and writedowns cost about $4 billion.

Net income fell to $3.7 billion, or 82 cents a share, according to a company statement, missing the $1.06 a share average estimate from 16 analysts surveyed by Bloomberg. The Charlotte, North Carolina-based bank set aside $3.3 billion for potential bad loans after U.S. home foreclosures rose to a record.

Bank of America fell the most in eight months in New York trading after Chief Executive Officer Kenneth Lewis called the results unacceptable. Lewis said during a conference call that the company plans to scale back its investment banking unit after trading mistakes led to $717 million of losses.

``The next couple of quarters will be messy for Bank of America,'' said Andrew Seibert, a fund manager at Pittsburgh- based Stewart Capital Advisors, which oversees $950 million and owns Bank of America shares. ``You are only seeing the beginning. The banks will be putting up a lot of money for reserves.''

Bank of America fell $1.42, or 2.8 percent, to $48.61 in 11:02 a.m. New York Stock Exchange composite trading. The bank's shares were down 6.3 percent this year through yesterday, compared with Citigroup Inc.'s 20 percent decline and JPMorgan Chase & Co.'s 4 percent drop.

Third-quarter revenue was $16.3 billion, falling short of analysts' estimates of $17.9 billion. The year-earlier profit was $5.4 billion, or $1.18, a share. Return on equity, a gauge of how effectively the company reinvests profits, shrank to 11 percent, from 16.6 percent a year earlier.