Investors concerned about how bad the subprime crisis is -- and how long it may continue to destabilize world markets -- may begin to get an answer on Wednesday when HSBC ( HBC) reports third-quarter earnings, say market participants.

But opinions differ widely, with some forecasting an easing of the effects of the subprime debacle when HSBC announces, while others see it as only halfway through.

Last week, the U.K.'s Sunday Telegraph reported that the bank will announce $1 billion in additional writedowns from its U.S. mortgage business when it announces third-quarter results. Earlier in the year, HSBC announced additional provisions of $2 billion for losses related to subprime loan debt.

Others say the writedowns may be larger still, with those at the most bearish end citing figures up to an additional $2 billion. Exactly how big that number is will be a sneak preview of how bad things may get in the U.S. mortgage market going into 2008.

"I cannot see any good news out of this," says John Wadle, Asian regional banks analyst for UBS in Hong Kong. "On Wednesday, the question is just how bad it's going to be."

But Wadle says that if the writedown is within the expected range of a further $1 billion, the market will take this as a signal that the subprime woes are finally manageable for both HSBC and other banks.

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